Millions of taxpayers across the UK are at serious risk of being hit with an automatic £100 penalty, as severe delays at HM Revenue and Customs (HMRC) create a customer service 'meltdown' in the run-up to the self-assessment deadline.
Service Delays and the Rush to File
This is Money reports that individuals are now waiting up to six weeks to receive vital login details, such as Unique Taxpayer Reference (UTR) numbers, a process that typically takes around 15 days. For those attempting to call for help, average wait times have ballooned to 58 minutes.
Andy Gibbs, a chartered tax adviser at TaxAssist Accountants, warned: "It is now probably too late if you are asking for a UTR for it to arrive in time. Unfortunately, this means many will be forced to accept the £100 penalty." He added that with an estimated six million returns still unfiled at the start of January, the demand for support is creating an overwhelming rush.
Root Causes of the HMRC Crisis
Tax experts point to systemic issues within the revenue service. Robert Salter, a director at tax advisory firm Blick Rothenberg, highlighted staffing problems, noting: "As many as a third of HMRC staff are on the national living wage, with many not well-trained staff being employed to handle calls." He suggested this lack of expertise leads to callers being suddenly disconnected when queries become too complex.
While an HMRC spokesperson stated that average phone wait times have reduced by 30% in the past year and that further improvement is a priority, the current backlog presents an immediate crisis for those facing the January 31st deadline.
How to Navigate the Deadline and Avoid Penalties
Despite the chaos, experts urge taxpayers not to surrender. The key advice is to submit something by the deadline, even if it requires later revision. Eddie Grant of the Personal Finance Society confirmed that submitting an initial return to meet the deadline is possible, with corrections allowed afterwards.
Andy Gibbs advised: "This is no time to throw up your arms in surrender. You should still plough ahead to avoid any further penalties," which can escalate quickly after the initial £100 fine.
Furthermore, many individuals may not need to file a return at all. Key exemptions include:
- Those who pay all their tax automatically via PAYE.
- Anyone who earned less than £1,000 in the tax year ending 5 April 2025 from side work or rent.
- Individuals renting out a furnished room in their home for less than £7,500 a year.
- Basic rate taxpayers with less than £1,000 in savings interest.
- State pensioners with an income above £12,570, where tax is usually deducted automatically.
Robert Salter issued a final warning, particularly to the self-employed: "Many are struggling with bills, but leaving it to the last moment could be a mistake. It just takes a glitch on the internet to mean you miss the deadline and get stung."
