300,000 self-employed workers must act to avoid HMRC fines
The 31st of October could be a nightmare this year for many self-employed consultants – but not because of the seasonal festivities of Halloween. If those filling out paper self-assessments for the year fall foul of Friday’s deadline, they could soon find themselves haunted by fines from HMRC.
Surveys repeatedly find that the UK’s independent consultants have higher job satisfaction than those in traditional roles. This has led their number to rise consistently in recent years. According to data from the Office for National Statistics, in late 2024, there were roughly 256,200 independents in the UK – up from just over 164,000 at the close of 2023.
But one of the risks consultants face when they go it alone, is having to file their own taxes. And with the October 31st fast approaching, some may be in line for a few tricks, rather than treats this Halloween.
The deadline for paper self-assessment is the end of October: much earlier than digital submission – which falls on January 31st. Although digital submissions are far more common (11.2 million were submitted online last year), government figures show that 304,000 people still filed paper self-assessment tax returns.
Among them will be consultants, who – if they haven’t already – will need to beware that digital and paper submissions follow the same rules. Anyone earning over £1,000 outside of PAYE in the last tax year must declare and pay tax on these earnings.
But with that deadline looming at the end of the week, entrepreneurs may face a consequence that leaves with a couple of sleepless nights. Should they submit a paper return late, it will incur a £100 penalty. After three months, additional daily fines of £10 apply, up to a maximum of £900, with even higher penalties for longer delays.
Speaking on the risks, Joe Phelan, money.co.uk business bank accounts expert, said, “Despite the introduction of Making Tax Digital (MTD) to enforce digital tax returns from April 2026, anyone completing a Self Assessment can still choose to submit a paper tax return this October for the 2024/25 tax year. In fact, the MTD changes from April 2026 will only initially apply to sole traders or landlords earning more than £50,000, before being phased in for those earning more than £30,000 from April 2027, and then more than £20,000 from April 2028.”
For consultants and other independents sticking with a paper tax return this month, Phelan issued three tips to help.
- Don’t delay: “The paper deadline is earlier than the digital one, and postal delays could affect submission. HMRC must receive your return by October 31st, so post it well in advance.”
- Carefully check your figures: “Unlike the online portal, paper returns require manual calculations, increasing the risk of errors. Gather all relevant financial documents and double-check your entries.”
- Keep a clear and organised paper trail: “Send your return by recorded delivery and retain proof of submission. This helps avoid penalties and is legally required for at least 22 months after the tax year ends.”
He concluded, “As self-assessment moves increasingly online, now may be the right time to make October 31st your last paper submission. Getting familiar with the digital process early can save you time and stress later, and you can find guidance on the government website. Using a dedicated business bank account can make the transition smoother, helping you track income, expenses, and deductions all in one place, which aligns neatly with the requirements of digital reporting.”
