Millions expected to miss self-assessment tax deadline as HMRC failings brought to light

The latest analysis by finance experts, RIFT, has shown that the number of HMRC customers likely to miss this month’s self assessment tax deadline is expected to climb, as they struggle to get the help they need following HMRC’s decision to shut its helpline for all but priority calls.

The self assessment deadline is fast approaching and as of midnight on the 31st January, millions of self-employed workers will be expected to have filed their self assessment tax returns. 

12 million people submitted a self-assessment last year

The analysis of Gov data by RIFT shows that last year (2022/23), £42.9 billion was paid in self-assessment income tax, the highest total seen in the last two decades (Since 2003/04). Last year, self-assessment tax receipts also accounted for 17.3% of total income tax receipts received by HMRC, up from 13% two decades ago - again the highest proportion seen during this time period.

Over 12m people were due to file a self assessment tax return last year. Of these, 8% missed the deadline. While this figure was down from 19% the year before, it still equated to a total of an estimated 1 million people. 

Failure to file your self assessment could see you hit with an initial late filing penalty of £100 if you are up to three months late in doing so.

You’ll have to pay more if it’s later, or if you pay your tax bill late and you’ll also be charged interest on your late payments.

Despite the year on year reduction in the number of people missing the self-assessment tax deadline, it’s expected that this downward trend will be reversed this year.

56% increase in time taken to answer calls

The reason? At the start of December last year, HMRC made the baffling announcement that they would be closing their helpline to all but priority calls. 

Further analysis of the latest Gov data by RIFT’s shows that in November 2023, just prior to this announcement, the average waiting time to speak to someone sat at an average of 22 minutes and 18 seconds. This was 56% longer versus November 2022, despite the fact that the number of calls received had actually declined by 1.4% during the same time period. 

Data from HMRC itself shows that nearly a quarter of all calls to HMRC advisers are made in the eight weeks leading up to the January self-assessment deadline. It’s not just those embarking on self-assessment for the first time in 2024 who are likely to struggle, there is also expected to be increased demand for help from pensioners who have been drawn into income tax territory, as well as those impacted by the Government’s stealth tax raid. 

Inadequate webchat service buckling under pressure

HMRC’s solution has been to funnel customers to their webchat service and the analysis by RIFT shows that in November last year, 99,381 webchats were submitted to HMRC, a year on year increase of 139.5% - a huge increase before the decision to close the HMRC helpline was even made.

However, the service has been criticised as not fit for purpose, with many failing to get the answers they need, while many more have also struggled to use it in the first place, including older generations and those with learning difficulties such as dyslexia.

Customers expected to be out of pocket

Not only are many customers in danger of receiving fines for missing the self-assessment deadline, many more are worried that they will underpay on the tax owed, making them liable to further financial penalties down the line. 

However, internal data from RIFT also shows that they could be out of pocket should they overpay. 

The figures from RIFT show that the average tax refund from HMRC currently stands at £1,625, having increased by 5.1% in the last year alone. 

But it’s not just an overpayment that could mean you are owed a refund. Many self-employed workers simply don’t realise that they could be owed money if they’ve purchased items such as office supplies, clothing or subscriptions related to their work. They can also claim a refund if they have made a donation to charity, clocked up mileage while travelling for work or incurred legal or financial costs such as hiring an accountant. 

Bradley Post, MD of RIFT, commented: “The decision by HMRC to close their helpline ahead of this month’s self-assessment deadline has been heavily criticised and quite rightly so as it's likely to impact millions of people, many of whom will be undertaking the task of completing a self-assessment for the first time.

While we can appreciate that the current economic landscape is far from ideal and HMRC itself is not immune to such factors, it's fair to say that it should have been much better prepared to deal with the increased demand for its help and advice.

For those still struggling with a self-assessment the best advice at this late stage is to contact them as early as possible with any query, have your finances well organised before you do and, if you're still at a loss, seek the help of additional industry professionals such as an accountant, or a tax return specialist like RIFT."