Around one million taxpayers who missed the 31 January self-assessment deadline now face an additional financial hit unless they settle what they owe to HMRC by 3 March.
According to leading audit, tax and business advisory firm Blick Rothenberg, anyone who has not paid their 2024/25 tax liability by that date will be subject to a 5% surcharge on outstanding amounts, in addition to late payment interest that has already begun to accrue.
Robert Salter, a director at Blick Rothenberg, said the clock is already ticking. “The one million taxpayers HMRC estimates missed the 31 January deadline to settle their 2024/25 UK tax liabilities must pay up by 3 March 2026 or face a 5% surcharge on any underpaid taxes plus late payment interest,” he said.
Late payment interest began accruing from 1 February 2026 at an annualised rate of 7.75%, meaning the longer the delay, the higher the total bill.
Salter illustrated the potential cost with a typical example. A taxpayer with a £2,000 self-assessment liability who pays on 1 April 2026 would incur an additional charge of around £125 on top of the original tax owed. That figure would continue to rise the longer the debt remains outstanding, as further 5% surcharges can be applied if the tax is still unpaid six and twelve months after the original deadline.
The surcharge regime has been a central feature of the UK’s self-assessment system for nearly three decades. “Most people would agree that it is appropriate for taxpayers who haven’t settled their liabilities to be subject to extra costs,” Salter noted.
However, he cautioned that economic pressures are making compliance more difficult for many. Frozen tax thresholds and fiscal drag have increased the effective tax burden in recent years, pulling more individuals into higher bands. At the same time, households continue to feel the impact of the cost-of-living crisis.
“Many taxpayers could be struggling to settle their liabilities on a timely basis,” Salter said.
While it is difficult to forecast the exact revenue HMRC may collect from late payment penalties this year, official statistics show that the tax authority has previously received more than £300 million in self-assessment-related penalties in a single year.
There are also concerns that the penalty total could rise further. A significant number of taxpayers have yet to submit their 2024/25 tax returns, while others who have filed may still not have paid the tax due.
“With the sharp increase in effective tax rates in recent years, HMRC’s penalty ‘record’ could be exceeded in the coming months,” Salter warned.
Taxpayers who are unable to pay in full are encouraged to contact HMRC as soon as possible to discuss a Time to Pay arrangement, which may help mitigate additional penalties, though interest will generally continue to accrue until the balance is cleared.
