With the January 31 self-assessment deadline fast approaching, HM Revenue and Customs (HMRC) is stepping up enforcement against late filers and non-compliant taxpayers. Over 6.36 million individuals have already filed their returns, but nearly 5.65 million still need to act to avoid financial penalties.
As part of ongoing efforts to reduce the tax gap, HMRC has reaffirmed its commitment to targeting non-compliance and recovering unpaid taxes from both individuals and businesses.
Deadline
The January 31, 2026, cut-off applies to those filing Self Assessment tax returns for the 2024-2025 tax year. Anyone who fails to meet this deadline risks automatic penalties – even if they owe no tax or pay what’s due on time.
According to HMRC:
- Tax returns must be submitted by 11:59 p.m. on January 31, 2026
- Any tax owed must also be paid by this deadline to avoid late payment penalties
Penalties
HMRC applies a series of escalating penalties for late filing or late payment. These can add up significantly the longer a return or payment remains outstanding.
Late Filing Penalties
| Time After Deadline | Penalty |
|---|---|
| Immediately | Fixed penalty of £100 |
| After 3 months | £10 daily penalty, up to 90 days (£900 max) |
| After 6 months | 5% of tax due or £300 (whichever is greater) |
| After 12 months | Additional 5% of tax due or £300 (whichever is greater) |
Late Payment Penalties
| Time After Due Date | Penalty |
|---|---|
| 30 days | 5% of tax unpaid |
| 6 months | Further 5% of tax unpaid |
| 12 months | Additional 5% of tax unpaid |
In addition to these penalties, interest will also be charged on any unpaid amounts. Prompt payment is essential to avoid further costs.
Enforcement
During a recent parliamentary exchange, MPs raised concerns about tax debts and non-compliant behavior. Joe Robertson, Conservative MP for Isle of Wight East, questioned what HMRC is doing to pursue unpaid tax from individuals and businesses.
Dan Tomlinson, Labour MP for Chipping Barnet and Exchequer Secretary to the Treasury, responded on January 5, 2026, outlining HMRC’s multi-layered approach.
He stated:
“HMRC is committed to closing the tax gap further and tackling non-compliant behaviours such as tax evasion, tax avoidance, criminal attacks, error, failure to take reasonable care, hidden economy activity, legal interpretation issues, and non-payment.”
Collections
Tomlinson explained that HMRC uses a tiered debt collection process, which includes:
- Initial phone calls and letters
- Engagement with private sector debt collection agencies
- Transitioning between different stages as the debt remains unresolved
If payments remain outstanding, enforcement powers may be used, such as:
- Taking control of goods
- County court debt recovery
- Applying to make a company or individual insolvent
These measures are targeted at the minority of taxpayers who refuse to pay or engage.
Compliance
HMRC’s compliance operations have had a significant financial impact. For the 2024-2025 tax year, compliance work contributed to £875.9 billion in tax revenue, including £48 billion in tax recovered or protected—up from £41.8 billion in the previous year.
At the Autumn Budget 2025, the government announced further compliance measures projected to raise £2.4 billion more in 2029-2030. When combined with earlier announcements, the total increase in projected revenue from closing the tax gap amounts to £10 billion by 2029-2030.
Records
Notably, HMRC tracks unpaid tax not by the type of taxpayer, but by the type of tax owed. Taxpayers can consult GOV.UK for more details on how lost revenue is tracked and how long HMRC pursues tax debts before closing a case.
The message from HMRC remains clear: taxpayers should act now to avoid unnecessary penalties and interest. Filing and paying by January 31, 2026, is the only way to stay compliant and avoid escalating enforcement.
FAQs
What is the tax return deadline?
January 31, 2026, by 11:59 p.m. for online filings.
What is the initial penalty for late filing?
£100, even if no tax is owed.
When do daily penalties start?
After 3 months of not filing.
Can HMRC take legal action over unpaid tax?
Yes, including court action or insolvency.
Is interest charged on unpaid tax?
Yes, interest applies in addition to penalties.
