HM Revenue and Customs (HMRC) has issued a critical alert, reminding potentially millions of UK taxpayers of an impending deadline that could carry serious financial consequences if missed the Self Assessment.
For the UK’s bustling self-employed community, which stood at around 4.4 million in the first quarter of 2025, according to Statista, managing tax obligations is a fundamental part of running a business. This figure represents approximately 13.5% of the total workforce, illustrating the significant scale of individuals who are personally responsible for reporting their income to the tax authority.
For new sole traders, freelancers, and those with new sources of untaxed income, the initial step into the tax system is often the most confusing. However, one date is non-negotiable for those who started earning untaxed income in the last tax year: October 5th.
Who Needs to Register for Self Assessment?
HMRC uses the Self Assessment system to collect Income Tax from individuals whose income is not fully taxed at source. While employed people usually have their tax deducted automatically via PAYE (Pay As You Earn), the system requires those with other forms of income to actively declare it.
You generally need to register for Self Assessment and complete a tax return if, in the previous tax year (which runs from April 6 to April 5 the following year), any of the following applied to you:
Key Taxpayer Groups That Must Register
The Self-Employed
You must register if you were self-employed as a sole trader and earned more than £1,000 in a tax year (this is the trading allowance threshold).
Landlords and Property Owners
Individuals earning income from renting out property, even if they are employed elsewhere, are typically required to report this income via Self Assessment.
Partners in a Business
If you are a partner in a business partnership, you must file a personal Self Assessment return.
Individuals with Untaxed Income
This covers a wide range of other scenarios, including high levels of savings or investment income, dividend income if you are a company director, or income from a ‘side hustle’ that isn’t taxed at source.
HMRC strongly urges individuals who are unsure if they are affected to use its free online tool to check their status, as a failure to do so could lead to penalties.
The Critical October 5th Registration Deadline
The crucial deadline for new Self Assessment registrations is October 5th.
This date applies to those who became self-employed or started earning untaxed income during the previous tax year. For example, if you began working as a freelancer in May 2024, the tax year ended on April 5, 2025. You would then have until October 5, 2025, to notify HMRC that you need to complete a tax return for that 2024/25 tax year.
Registering allows HMRC to set up your account and issue you with your Unique Taxpayer Reference (UTR), which is essential for filing your return. Once registered, the deadline to file your tax return online and pay your tax bill is the subsequent January 31st.
The ‘Failure to Notify’ Penalty
If you miss the October 5th registration deadline and do not pay your full tax bill by the main payment deadline of January 31st, HMRC may apply a ‘failure to notify’ penalty.
This penalty is not a fixed amount; it’s calculated based on the amount of tax that was unpaid as a result of your failure to notify. It is usually issued within 12 months of HMRC receiving your late tax return. While you can provide details of a ‘reasonable excuse’ for missing the deadline, officials are clear that procrastination or simply forgetting are not typically accepted.
The High Cost of Late Filing and Payment
Even if you register on time, failing to submit your return or pay your bill by the January deadline can lead to rapidly escalating penalties. HMRC sets out a tiered penalty structure to encourage prompt compliance.
Late Filing Penalties
| Delay Period | Penalty Charge |
| 1 Day Late | A fixed penalty of £100 is issued automatically, regardless of whether you owe any tax or not. |
| After 3 Months | Additional daily penalties of £10 per day are added for up to 90 days, totalling a maximum of £900. |
| After 6 Months | A further penalty of the higher of 5% of the tax due or £300 is charged. |
| After 12 Months | Another penalty of the higher of 5% of the tax due or £300 is charged. |
In total, an unfiled return can cost a minimum of £1,600 in penalties, plus the tax owed and interest, even if the tax is already paid!
Late Payment Penalties
In addition to the late filing fines, you will also face penalties for paying your tax bill late:
- 30 days late: 5% of the tax unpaid at that date.
- 6 months late: A further 5% of the tax unpaid at that date.
- 12 months late: A further 5% of the tax unpaid at that date.
You’ll also be charged interest on the amount owed, compounding the financial strain.
Support Available for Struggling Taxpayers
For anyone feeling overwhelmed or struggling to meet their Self Assessment obligations, there are constructive options available. Proactivity is key—the sooner you reach out, the better the outcome is likely to be.
HMRC’s Dedicated Support Services
Time to Pay’ Arrangement
If you cannot afford to pay your tax bill by the January 31st deadline, you can call the HMRC payment support service to negotiate a ‘Time to Pay’ arrangement. This sets up a payment plan to pay your tax debt over an agreed period, which can help to prevent or reduce late payment penalties.
Extra Support Team
HMRC has an Extra Support Team for individuals whose health condition or personal circumstances make it difficult to deal with their tax affairs. This can include those experiencing financial hardship, mental health conditions, or cognitive difficulties. Contacting an HMRC helpline and explaining your situation can lead to being transferred to this specialist team for more tailored help.
Free, Independent Tax Advice
A number of independent organisations offer free, confidential advice, especially for those on a low income:
- TaxAid: Provides tax advice to working-age people who cannot afford to pay for professional assistance.
- Tax Help for Older People: Offers help to people aged 60 and over on low incomes.
- Citizens Advice: Can offer guidance and refer you to the right specialist support.
The transition to self-employment brings freedom, but with that comes responsibility for your own tax affairs. By meeting the October 5th registration deadline, you’ll secure your Unique Taxpayer Reference (UTR) and buy yourself valuable time to prepare for the January filing and payment date. Don’t wait until it’s too late—act now to safeguard your finances and your business.
Frequently Asked Questions (FAQs)
What is the UK tax year that the October 5th registration deadline relates to?
The October 5th registration deadline relates to the previous tax year, which runs from April 6th to April 5th the following year. For a deadline in October 2025, you are registering to file for the tax year that ended in April 2025.
I was employed for most of the year and only earned £500 from freelance work. Do I still need to register?
No. You only need to register if your gross income from self-employment exceeded the £1,000 Trading Allowance in the last tax year.
What exactly is the ‘failure to notify’ penalty and how is it calculated?
The ‘failure to notify’ penalty is applied if you miss the October 5th registration deadline and do not pay your full tax bill by the January 31st payment deadline. The penalty amount is calculated as a percentage of the potential lost revenue (the tax you should have paid).
If I register late but still file and pay my tax bill on time by January 31st, will I still be penalized?
If you register after October 5th, but manage to pay your entire tax liability in full by the January 31st payment deadline, the ‘failure to notify’ penalty should be zero. However, it is still a legal requirement to notify HMRC by the October 5th deadline.
What is a ‘reasonable excuse’ for missing a deadline?
A ‘reasonable excuse’ is an unexpected or serious event that genuinely prevented you from meeting the deadline. Examples HMRC might consider include a serious illness, the death of a close relative, or a major technical issue with HMRC’s online service. Simply forgetting or a lack of funds are generally not considered reasonable excuses.
I am struggling financially and can’t pay my tax bill. What is my first step?
Your first step should be to contact the HMRC payment support service as soon as possible to discuss a ‘Time to Pay’ arrangement. This is a payment plan that can help you pay off your tax liability in manageable instalments and can help prevent or mitigate late payment penalties.