Millions of people have yet to file their self-assessment tax return with the HMRC as the deadline fast approaches. The tax authority has warned those who fail to do so could face major financial penalties.
Around 5.4 million people still need to complete the online assessment, including many thrifty entrepreneurs who use platforms like Vinted, eBay, and Etsy. From January last year, the rules changed to ensure people making money online are paying the correct amount of tax.
Online marketplace platforms like these are now required to collect information about UK sellers to share with the HMRC. They will only do this for sellers who sell 30 items or more a year or have total earnings over £1,700.
However, whether you will need to fill out an assessment depends on how much money is made. There is a £1,000 tax-free limit, so most earning under this on the platforms won’t have to pay.
There are several other groups of people who need to file a self-assessment tax return. The HMRC says you may need to file one if you:
For those who are unsure, the HMRC has a handy tool to check if you need to file an assessment.
Myrtle Lloyd, HMRC’s director general for customer services, said: “We know completing your tax return isn’t the most exciting item on your New Year to-do list, but it’s important to file and pay on time to avoid penalties or being charged interest.
“The quickest and easiest way to complete your tax return and pay any tax owed is to use HMRC’s online services – go to GOV.UK and search ‘self assessment’ to get started now.”
What are the penalties for late tax returns?
According to the HMRC, the penalties are:
