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Self-employed Britons face fines of up to £900 under new HMRC quarterly tax rules

Taxpayers stand to save both money and headaches in 2025 by committing to better tax practices in the year ahead, according to leading audit, tax and business advisory firm Blick Rothenberg.

Self-employed workers and landlords earning over £50,000 a year will face fines of up to £900 if they miss new quarterly tax deadlines under HMRC’s Making Tax Digital reforms.

The changes, due from April 2026, will replace the traditional annual self-assessment return with a digital reporting system requiring updates every three months.

According to research by Accountex, four in five accountants see Making Tax Digital as their biggest professional challenge in the year ahead. A third admit they feel unprepared for the shift, while one in ten say they are “severely underprepared”.

Robert Jones, proprietor of Swift Tax Refunds, warned that the first reporting period – 6 April to 5 July 2026 – must be filed by 7 August, leaving little room for error.

“Failing to file a return on time results in a £100 fine straight away,” Jones explained. “If the return is still outstanding after three months, daily £10 penalties start to add up, reaching up to £900.”

If a return is still overdue after six months, HMRC will impose an additional charge of £300 or 5% of the outstanding tax – whichever is greater. This same penalty is applied again at the twelve-month point.

Deliberate non-compliance can attract even harsher sanctions, while late payment of tax also carries separate penalties: 5% of the unpaid amount after one, six, and twelve months, plus daily interest from the original due date.

The move to quarterly digital reporting will require self-employed individuals and landlords to keep accurate, up-to-date records year-round, rather than focusing on the traditional January tax deadline.

Those with multiple income streams – for example, combining self-employment with rental income – will need to submit separate quarterly reports for each source.

Jones said: “This is a big behavioural change. People will have to be much more disciplined with record-keeping if they want to avoid costly mistakes.”

Read more:
Self-employed Britons face fines of up to £900 under new HMRC quarterly tax rules

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