Charlene Young, senior pensions and savings expert at AJ Bell, outlines who needs to file a return and what quirks to watch out for when it comes to the 2024/25 tax year:
“The festive period is now firmly in the rear-view mirror and millions of people are yet to file their self-assessment tax return for the 2024/25 tax year ahead of the 31 January deadline. Although nearly 20,000 filed a return on New Year’s Day, just under half of the expected 12 million tax returns are yet to be received by the taxman, according to the latest figures from HMRC.
“With less than four weeks to go, here’s a rundown of who actually needs to file, and what might make the 2024/25 returns different to other tax years.
Who needs to file?
“You must file a tax return for 2024/25 if any of the below applied during that tax year:
You worked for yourself and earned more than £1,000You had to pay capital gains tax on something you sold or transferred for a profit
You had to pay the High Income Child Benefit Charge and do not pay it through PAYE
You were a partner in a business partnership
“Even if none the above apply to you, you might still have to file if you’ve received more than £10,000 from savings and investments in the tax year.
“In previous years, taxpayers had to file if they earned over a certain threshold (£150,000 last year). Although that rule has now fallen away where a person’s only income source is taxed under PAYE, many people wrongly believe they don’t need to file if their circumstances simply change or they have no tax to pay. This is only true if you’ve told HMRC about your change in circumstances, or they’ve already confirmed to you directly that you don’t need to file.
“If HMRC wrote to you asking you to send a return but you believe you don’t need to, you’ll need to tell them as soon as possible. HMRC might not be aware of changes in your circumstances, so if you don’t let them know, you still risk a fine for not filing, even if you have no tax to pay.
“If you’re at all unsure, you can check whether you need to complete a tax return using this handy tool on the government website. And even if you don’t have to file, you might still need to tell HMRC directly about a side hustle or any other ways you top up your income.
Mid-year CGT rule changes could present hurdle for filers
“The main rates of capital gains tax (CGT) increased to 18% for basic rate taxpayers and 24% for those paying higher rates on 30 October 2024. But the mid-year change means some people risk underreporting and underpaying any tax they owe for 2024/25, particularly if they rely on HMRC’s systems – perhaps because they complete them without the help of commercial software or an accountant.
“HMRC’s tax software can’t cope with different tax rates across a tax year and applies the (lower) rates in force before 30 October to all chargeable gains on investments like shares or investment funds. Although your savings and investment providers would have sent you an annual summary to help you work out whether your total gains are over your annual tax-free allowance, you’ll need to take extra care if any of these gains were made on or after 30 October 2024.
“HMRC has developed an online calculator to help taxpayers report correctly. It will work out an adjustment to include on the return so that the correct amount of tax is declared and paid. This figure should be inputted into box 51 of the capital gains tax summary pages of your return, and you should also save the online results page and submit it as an attachment at the same time.
“If you use commercial software to calculate and submit your tax return, this might have been updated to use the correct rates, but you should still double check with your accountant and the software provider.
Child benefit charge changes for 2024/25
“The thresholds for clawing back child benefit increased on 6 April 2024 meaning it would have been withdrawn gradually once you or your partner earned over £60,000, before being completely extinguished over £80,000 under the High Income Child Benefit Charge rules.
“If you need to repay some or all of your child benefit payments for that year and your tax code wasn’t adjusted already to account for it, you’ll need to repay via self-assessment. Eventually, the taxman will catch up with those who fail to do so, and taxpayers may incur an extra penalty as a result.
“You might be able to leave the tax return system and pay through PAYE, if the only reason you complete a tax return is to pay the clawback charge. To do this you must call HMRC without delay.
Don’t forget to pay any tax
“And finally, don’t forget to pay on time too. Whenever you filed (or plan to), make sure you’ve paid what you owe by midnight on 31 January 2026.
“If you don’t, you’ll start to accrue daily interest from 1 February. The annual interest rate charged by HMRC will sit at a whopping 7.75% from 9 January 2026, with further surcharges if the bill remains unpaid months later.
“If you’re having difficulty paying, you might be able to agree a payment plan online with HMRC as long as you owe £30,000 or less. You can also apply to reduce your payments on account for the next year if you think your earnings will be significantly lower than before.”
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