PENALTIES LOOMING: Millions at risk of missing tax deadline amid HMRC helpline closure

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Finance experts from RIFT have revealed that a significant number of HMRC customers are likely to miss the impending self-assessment tax deadline and face penalties.

RIFT say the worrying situation stems from HMRC's decision to limit its helpline services to only priority calls, leaving countless individuals struggling for essential support.

As the clock ticks towards the 31 January deadline, the pressure mounts on millions of self-employed workers in the UK to file their self-assessment tax returns. However, the closure of HMRC's helpline for general inquiries has cast a shadow over this year's process, potentially reversing the recent trend of decreasing late submissions.

The significance of self-assessment tax contributions cannot be understated, with RIFT's analysis of government data revealing that in the fiscal year 2022/23, a record £42.9 billion was collected, accounting for 17.3% of HMRC's total income tax receipts. This marks a notable increase from 13% two decades ago.

Despite improvements in recent years, with only 8% missing the deadline last year compared to 19% the year before, the helpline closure raises serious concerns. In November 2023, just before this announcement, HMRC already faced a 56% increase in average call waiting times compared to the previous year, even as call volumes slightly decreased.

The closure decision, taken at the start of December, would suggest to be ill-timed given that nearly a quarter of all calls to HMRC advisors occur in the eight weeks preceding the January deadline. This change disproportionately affects not only first-time filers but also pensioners and those impacted by recent tax changes.

HMRC's alternative, a webchat service, saw a dramatic 139.5% increase in usage year-on-year as of November last year. However, this service has faced criticism for being inadequate, especially for older individuals and those with learning difficulties such as dyslexia.

The stakes are high, as failing to file self-assessment can lead to a minimum fine of £100 for delays up to three months, with further penalties for longer delays and late tax payments, including interest charges.

Furthermore, RIFT highlights another critical issue: the risk of overpayment. Their data shows the average tax refund from HMRC stands at £1,625, having risen 5.1% in the last year. Many self-employed individuals are unaware they could claim refunds for various work-related expenses, from office supplies to professional fees.

Bradley Post, MD of RIFT, said: “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."