Over 28,000 freelancers risk fines as self-assessment deadline looms

With the upcoming “dreadline” for Self-Assessment Tax Returns just two days away, new data has revealed that over 28,000 are at risk of being hit with £100 fines for late filings.

While the cut-off date for online filings isn’t until January 2026, the October 31st deadline often involves a frenzy of late paper filers — though this is something Making Tax Digital (MTD) aims to eliminate once it becomes mandatory from April 2026.

Still, despite the UK government’s shift toward digital systems, many freelancers and small business owners are still expected to miss the deadline this year, according to research by NerdWallet UK. 

How many people are expected to miss the deadline?

Sorting out taxes is stressful enough without the burden of being fined by HMRC.

Yet, data by NerdWallet UK predicts that 28,784 business owners and freelancers will miss the paper submission deadline this week, based on 9.46% people missing it last year.

The consequences of missing the filing deadline are an automatic penalty of £100 from HMRC, even if you don’t owe any tax. If the return hasn’t been filed within three months of the deadline, an additional £10 penalty is added daily, with a maximum £900 charge.

Why are so many people missing the deadline?

Despite the rise of digital tools and accounting software, a surprising number of founders continue to juggle spreadsheets, receipts, and deadlines on their own.

NerdWallet UK’s research reveals that 33% of business owners still manage their finances manually, with 27% doing so without help from an accountant. 

Yet further data suggests that founders are struggling with financial illiteracy. A survey by accounting software company Xero revealed that 55% of SMEs admit to avoiding financial management. 

It also found that one in ten of the UK’s smallest businesses (those with nine employees or fewer) believe they don’t need to declare all of their taxable income to HMRC. 

The lack of awareness around tax bands among freelancers is another likely reason many people miss tax deadlines altogether. Nearly half of sole traders also aren’t prepared for MTD, despite the initiative becoming mandatory for self-employed income from April 2026.

How can freelancers avoid getting fined?

The lack of financial literacy among founders has inevitably led to stunted growth and financial losses.

NerdWallet UK reported that UK business owners are spending an average of seven hours on financial management tasks per week — totalling an average of £17,917 in lost earnings annually.

An extra £100 will only add to this financial burden, but there are a few ways founders can avoid the penalty.

First, it’s crucial to remember important deadlines for submitting your tax returns. Even just something as simple as setting reminders or making a note in your calendar can make it easier to stay on track and avoid last-minute panic. If you do miss the paper deadline, gather all the relevant documents and file online as soon as possible. 

Next, a good accounting software can make managing your finances much easier and more accurate as it automates repetitive tasks (e.g. invoicing), gives you real-time insights into cash flow and spending, and lets you track your finances throughout the year.

Alternatively, hiring an accountant can also take weight off your shoulders, as they know the ins and outs of tax rules, can help you avoid mistakes, and can help you save money as well. After all, 83% of SMEs say that their accountant has helped reduce the impact of inflation on their business, so it’s definitely worth the investment if you have the budget for it.

And remember, you can always contact HMRC if you have questions about the process or issues with payments. That way, they’ll be aware of your situation and shouldn’t impose added fines.