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100,000s risk fines for filing late tax returns – even though they owe no tax

Hundreds of thousands of tax returns are filed late each year by people who don't owe any tax, data obtained by shows – meaning many risk a fine of at least £100. If you still need to file a return this year, act fast – the deadline for filing your tax return this year is 11.59pm on Thursday 31 January.

Even if you don't actually have any tax liability, you may need to file a tax return for a number of reasons, for example if you're self-employed but haven't earned enough to owe HMRC, or you filed a tax return last year and haven't been told you don't need to this year.

HM Revenue & Customs figures released to us under the Freedom of Information Act show that between April 2012 and April 2017, some 1,635,000 late tax returns were filed by people who owed "£0 or less" in tax – meaning they didn't need to pay anything, and some could even have been due cash back from the taxman. In 2016/17, the last year for which figures are available, some 239,000 such returns were filed late.

Those who file their tax return late face a fine of at least £100 unless they have an officially-approved excuse, such as an illness or bereavement immediately before the deadline. While some of those filing late will have offered a valid excuse and not been fined, many are likely to have had to pay up. HMRC says simply not owing any tax is not a valid excuse which will stop you being fined if you file your return late.

As well as the 1.6 million late returns from people owing no tax, a further 268,000 late returns were recorded over the five years from people who owed less than £100 in tax – meaning they risked paying more in fines than they owed in tax.

See our Self-assessment tax returns guide for full help on filing before the deadline.

What do the figures show?

Here's a breakdown of the HMRC data:

Number of late tax returns filed by people who owed no tax 

Financial year Number of late tax returns
2012/13 313,000
2013/14 415,000
2014/15 362,000
2015/16 306,000
2016/17 239,000

These figures show those who had a tax liability of "£0 or less" – either because they didn't need to pay any tax to HMRC once their calculations were complete, or because they'd already paid their tax automatically through their employer.

HMRC told us there may have been others not included in these figures who did owe tax and paid their bill to HMRC on time, but were still late filing the tax return itself. This could have happened if, for example, they'd paid their tax bill in advance through a budget payment plan, or had a credit on their self-assessment account from an earlier overpayment.

These people could therefore have also risked fines for filing a return late when they didn't owe additional tax, though an accountancy expert told us this is likely to be fairly uncommon.

Who needs to file a tax return?

Most UK taxpayers have their taxes deducted automatically from their wages, pensions or savings, and so don't need to file a tax return. But around 11.5 million tax returns are due this year, from individuals or businesses who haven't had tax automatically deducted, or have earned extra untaxed income.

Most people who file tax returns will also need to pay their tax liability by the self-assessment deadline of 31 January - we've a full list of those who need to file a return in our Self-assessment tax returns guide, and the Government has a free tool to check if you need to send one.

But it's important to understand you may need to file a return even if you don't owe any tax. This could be the case if:

  • You're self-employed as a sole trader, and earned more than £1,000 but less than your personal tax allowance last financial year - for 2017/18, this was £11,500.

  • You're a partner in a business partnership, and earned less than your personal tax allowance last financial year.

  • You earned more than £100,000 last financial year, and have already paid your tax through PAYE.

  • You earned income from abroad in the last financial year, and earned less than your personal tax allowance overall.

  • You hold a position that affects your tax - for example, you're a religious minister, Lloyd's underwriter, exam moderator or invigilator, or share fisherman - and you earned less than your personal tax allowance last financial year.

  • HMRC has told you that you need to send a tax return, and you haven't contacted it to query this.

  • You filed a tax return last year (even if you didn't owe any tax then either), and haven't received official confirmation from HMRC that you don't need to send a return this year.

If you don't owe tax but need to file a return only because you filed one last year or because HMRC says you have to - and none of the other factors apply to you - you can contact HMRC and ask it to stop sending returns.

Get in touch using your Government Gateway account, by post or by phoning 0300 200 3310. But remember, you won't be exempt until you have official confirmation from HMRC (and for this year, given the deadline's this week, it may be best to file a return anyway).

What happens if I file my tax return late?

If you miss the self-assessment tax deadline, which this year is 31 January 2019, you'll be landed with an automatic fine of £100 – even if you don't owe any tax.

The longer you leave it, the more penalties you can rack up. If you miss the deadline by more than three months, you'll start being fined £10 a day, up to a maximum of £900, and there are further penalties at six and 12 months.

If you do owe tax, you'll also be fined for paying your bill late – see a full explanation of all the penalties.

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