HMRC self-assessment: why the 5 October registration deadline still matters
A commonly overlooked requirement is that individuals who need to register for self-assessment for the 2024/2025 tax year must do so by 5 October. Those who are impacted have often received income without any tax deducted at source. This typically applies to those who are self-employed, landlords earning rental income, investors receiving dividends or realising capital gains, and those with earnings from a side hustle. Anyone paying the high-income child benefit charge may also need to register.
The process for registering for self-assessment is usually relatively straightforward and can be done online. Once registered for self-assessment, a unique taxpayer reference (UTR) will be issued to file a tax return. The issue is that, while the 31 January deadline for submitting a tax return is well known to many, the same cannot necessarily be said for the 5 October deadline, and it can take taxpayers by surprise.
Failure to notify penalties will apply for missing the 5 October registration deadline, and these are calculated as a percentage of the amount of unpaid tax due to the failure, referred to as ‘potential lost revenue’. No penalty is applied if the individual has a ‘reasonable excuse’. However, if there is no reasonable excuse, the severity of the penalty depends on a variety of factors, including whether the failure to notify was non-deliberate, deliberate, or deliberate and concealed. Whether the disclosure was prompted by HMRC or not will also play a factor in the level of penalty, along with whether HMRC is informed of the unpaid tax within 12 months of it being due.
Penalties can range from 0% to 30% for non-deliberate failures but can be as much as 100% of the potential lost revenue, effectively the unpaid tax, for deliberate and concealed cases. The penalty applied may be reduced if individuals fully cooperate with HMRC or make an unprompted disclosure. For those with a reasonable excuse, HMRC will not charge a penalty at all. Additionally, provided the tax is paid in full by 31 January 2026, these penalties should be nil.
With thousands of taxpayers being taken out of self-assessment automatically by HMRC, many individuals will assume they do not need to register for self-assessment as a result. That will probably be correct for most people, but the responsibility to check sits with the taxpayer. Making the wrong assumption may ultimately prove to be a costly mistake.