Self-employed workers on lower incomes are significantly more likely to miss the self-assessment tax return deadline compared with higher earners, according to new figures linked to HM Revenue and Customs (HMRC).
The data, obtained through a freedom of information request by retirement provider PensionBee, highlights growing concerns around financial pressures, limited support access, and awareness gaps among lower-income self-employed workers.
Missing the self-assessment deadline can result in an automatic £100 penalty, along with additional charges if delays continue.
Findings
The figures relate to the 2023-24 tax year and show notable differences in late filing rates across income groups.
According to calculations based on HMRC data:
| Taxpayer Group | Late Filing Rate |
|---|---|
| Below basic rate taxpayers | 5.9% |
| Basic rate taxpayers | 3.1% |
| Higher rate taxpayers | 2.7% |
| Additional rate taxpayers | 2.6% |
The findings suggest lower-income self-employed individuals are almost twice as likely to submit their tax returns late compared with higher earners.
In total, around 180,000 self-employed people filed late during the 2023-24 period. PensionBee said approximately 94% of those late filers were either below basic rate or basic rate taxpayers.
Penalties
HMRC generally applies an initial £100 penalty when self-assessment tax returns are submitted after the January 31 deadline.
Additional penalties may apply if returns remain outstanding for longer periods. However, HMRC can cancel or reduce penalties if taxpayers provide what it considers a reasonable excuse for missing the deadline.
Examples of reasonable excuses may include:
- Serious illness
- Bereavement
- Technical problems with HMRC systems
- Unexpected emergencies
Taxpayers are usually expected to explain their circumstances directly to HMRC when requesting a review of penalties.
Challenges
PensionBee said the data points to broader structural challenges affecting lower-income self-employed workers.
Many lower earners may have less access to:
- Accountants
- Financial advisers
- Tax planning support
- Pension guidance
Income volatility may also make it harder for some workers to keep up with fixed financial deadlines and administrative tasks.
The company added that previous research suggests some self-employed workers are unaware that pension contributions may qualify for tax relief.
Comments
Lisa Picardo, chief business officer UK at PensionBee, said late filing patterns are heavily concentrated among lower-income self-employed workers.
She described many affected workers as part of an “invisible workforce” facing inconsistent earnings and limited support.
According to Picardo, financial administration tasks such as filing tax returns or contributing to pensions can become more difficult when income fluctuates month to month.
She also suggested that missing deadlines is often linked to wider financial pressures rather than simple oversight.
Response
HMRC said it continues to focus on helping taxpayers understand their obligations and available support services.
An HMRC spokesperson said the department runs annual campaigns encouraging self-assessment customers to file on time. The agency also provides online guidance through gov.uk and offers additional assistance through support advisers.
According to HMRC, around 11.5 million customers submitted their 2024-25 tax returns on time.
Support
Self-employed workers who are unsure about filing requirements can access several forms of support before the annual deadline.
These may include:
| Support Option | Purpose |
|---|---|
| HMRC online guidance | Filing instructions and deadlines |
| Tax advisers | Personal tax assistance |
| Accountants | Return preparation |
| HMRC helplines | Direct customer support |
Financial experts often recommend preparing tax documents well before January deadlines to reduce the risk of penalties and unexpected payment issues.
Outlook
The latest figures highlight the uneven impact of tax administration challenges across different income groups within the self-employed workforce.
While overall compliance levels remain high, the data suggests lower-income workers may face additional barriers in meeting self-assessment obligations on time.
As self-employment continues to evolve across the UK economy, support access, financial education, and administrative simplicity are likely to remain important issues for both policymakers and taxpayers.
FAQs
What is the HMRC late filing penalty?
Most late returns receive a £100 fine.
Who misses deadlines most often?
Lower-income self-employed workers.
Can HMRC waive penalties?
Yes, with a reasonable excuse.
When is the tax return deadline?
Usually January 31 each year.
