Andy Wood, an international tax adviser from Tax Natives, highlights the importance of acting quickly.

He said: “January may feel like a long way off as we focus on Christmas preparations, but the reality is that the Self Assessment deadline is just weeks away. Last-minute filings can result in avoidable penalties and missed opportunities to arrange flexible payments.”

The Time to Pay system offered by HMRC allows those who owe less than £30,000 to set up a payment plan online, spreading the cost over up to 12 months. For taxpayers with larger tax bills, flexible arrangements can be made by contacting HMRC directly. More than 15,000 customers have already taken advantage of this system for the 2023 to 2024 tax year.

“HMRC’s Time to Pay system is a fantastic tool for taxpayers needing extra breathing room. However, to take advantage of this, you must complete your Self Assessment return first. Delaying this process could mean missing out on the chance to manage your payments in a way that suits your financial circumstances.”

The penalty for late filing is £100, which can increase significantly over time if the delay persists. Late payment penalties are also added to outstanding balances. Andy Wood urges taxpayers not to underestimate the importance of acting fast.

“Failing to file your tax return or pay on time can result in financial penalties that only add to the burden. By acting now, taxpayers can avoid these costs and take control of their financial commitments,” he said.

HMRC has also made it easier than ever for people to settle their tax bills. Taxpayers can use the free HMRC app, the GOV.UK website, or traditional methods like online banking, telephone banking, or even payments via debit or corporate credit cards.

Wood notes the variety of payment options but advises taxpayers to carefully plan their approach:

“HMRC has made significant strides in offering flexible, convenient ways to pay, from online banking to the HMRC app. Take a moment to review your options and choose the method that works best for your financial situation. Planning now could make January far less stressful.”

As households across the UK focus on festive celebrations, Wood reminds taxpayers to prioritise their financial health:

“Christmas is a time for joy, not stress. By taking a proactive approach to your Self Assessment obligations, you can enter the New Year with peace of mind, knowing your finances are under control. Support is available for those who need it – don’t hesitate to use it.”

Nearly half of the 144,298 scams reported to HMRC were fake self-assessment rebates and there was a 16.7% increase in the number of scam referrals in the 12 months to October 2024.

Charlene Young, pensions and savings expert at AJ Bell, said: “Last year saw a record 11.5 million taxpayers file a self-assessment return by the 31 January deadline, with rising interest rates, reduced allowances and frozen tax thresholds combining to force more people than ever before into the tax return trap. With this year set to break records once again, HMRC has issued a warning for taxpayers to be on the lookout for scam activity.”

She continued: “HMRC reported a 16.7% increase in total scam referrals (144,298) in the 12 months to October 2024, up from 123,596 in the same period last year.

“Scammers are preying on people up against the 31 January deadline as well as those who file well ahead of time. There’s good reason to file early, as this can put you first in line for a refund. But remember that if you are due anything HMRC will not offer this by text message or email. You should claim any refund due using your online HMRC account or the official HMRC app.

“This busy period is also the ideal time for a phishing mission to try and intercept personal data including bank details from people who might not be used to the self-assessment system and how HMRC communicates with taxpayers.”

She further said: “Be alert to scams and the tricks fraudsters use to catch us all out. Examples include threatening (often automated) voicemails asking for personal information or suspicious email and text messages offering you a refund.

“HMRC has confirmed it will not ask for personal information or offer refunds by text message and emails and has urged taxpayers to report any communications they received to prevent others being targeted.

“If you receive a communication that doesn’t look right, you should check government scams advice and report suspicious communications direct to HMRC. Emails can be forwarded to phishing@hmrc.gov.uk and texts claiming to be from HMRC to 60599.”

According to data revealed by the Freedom of Information request, the number of AFOs has risen from 125 in the 2021/2022 financial year to 252 in 2022/2023, and has increased to 341 in 2023/2024, representing an increase of more than 170% over a three-year period.

Additionally, the value of assets frozen by AFOs has increased from £43m in 2021/2022 to £57m in 2023/24.

The number of Forfeiture Orders has also increased over the same period, rising from 92 in 2021/2022 to 144 in 2023/2024, when the total value of assets seized was close to £23m.

AFOs were introduced under the Criminal Finances Act 2017 and allow a court to order bank accounts to be frozen for up to two years while law enforcement agencies investigate the source of funds and prevent disposal.

AFOs are granted by the Magistrates Court, and do not require authorisation by a senior judge, or indeed a qualified lawyer. The threshold is low. Rather than proving criminality to the usual standard of beyond reasonable doubt, the relevant law enforcement agency only needs to prove its case on a balance of probabilities. AFOs can apply to accounts with balances over £1,000 and enable authorities to preserve funds for subsequent forfeiture.

The low evidential threshold for obtaining an AFO means that this rise in their use is potentially concerning, argues Adam Craggs, Partner and Head of Tax Disputes at RPC. “Since their introduction, we have seen HMRC invoking these powers on an increasingly regular basis, even though we know that in many cases they do not lead to a subsequent successful forfeiture of assets or criminal prosecution. While money can be returned, this is of little consolation for the individuals and businesses that see their operations unduly impacted as a consequence of their funds being frozen.”

Not all AFOs will result in a forfeiture, which occurs only when the court is satisfied that the moneys seized are the proceeds of crime or used to facilitate a crime. In the 2023/2024 financial year, £14.5m of assets were returned, relating to 75 AFOs.

Michelle Sloane, Partner at RPC added: “As AFOs and FOs become more frequent, it is critical that individuals and businesses are aware of their rights and how to successfully challenge them. Those affected should immediately contact a specialist solicitor, who will be able to advise on appropriate next steps to minimise disruption to their lives and business operations.”

The ‘One to Many’ letter from HMRC warns recipients that if an assessment concludes that there is additional capital gains tax or income tax to pay on previously undisclosed crypto gains, there may also be interest due on any late payments as well as penalties to pay.

Accountancy firm BDO flagged in a statement on 8 August that the tax treatment of crypto assets can be complex. However, in simple terms HMRC sees the profit or loss made on buying and selling of exchange tokens as within the charge to Capital Gains Tax (CGT). Its guidance says that only in exceptional circumstances will HMRC accept that buying and selling of crypto amounts to a trade for tax purposes.

For individuals, this means that if you have sold crypto for a profit during the tax year, you may have reporting and tax obligations, and need to consider whether you need to file a tax return.

BDO has warned that this letter is targeted at those the tax authority knows have ‘disposed’ of crypto assets. Such disposals will include circumstances in which people have exchanged one cryptocurrency for another or paid for a product or service using cryptocurrency.

Several years of unpaid tax may be payable and, depending on the reason why it is undisclosed so far, HMRC can have up to 20 years to assess additional tax.

Last year, HMRC launched a new campaign to encourage people to come forward and disclose any unpaid tax on crypto assets such as exchange tokens, NFTs and utility tokens – the first time the tax authority had introduced a specific disclosure process for those owning crypto assets.

Paul Falvey, a tax partner at BDO said: “Many owners of crypto assets may not be fully aware of their obligations and may not have filed a tax return before. They could well get a shock when this letter hits the doormat – but the worst thing they could do is to ignore it.

“To bring their tax position up to date, individuals may need to source reports from their financial advisers or online platforms. In certain circumstances, those affected would do well to seek specialist advice on the most appropriate disclosure facility to use.

“If additional tax is due then HMRC could charge late payment interest and impose tax-geared penalties. These penalties can be up to 100% of the tax due – or more if the holding was based offshore.”

HMRC already receives data from cryptoasset digital platforms about the transactions of those buying and selling crypto currencies or other assets on request. In future, they will receive this information automatically under the Crypto Asset Reporting Framework.

In a statement on 18 July, the UK’s HMRC said Stephen Hirst, 62, and his brother Michael, 55, both from Yorkshire, used offshore companies in overseas territories to hide money from the sale of land in Wakefield to evade paying tax.

During sentencing at Leeds Crown Court on 18 July it was confirmed the men had paid back the entire £3,247,613, along with prosecution costs of £31,500.

They were both handed two-year prison sentences, suspended for two years, fined a total of £20,000 and handed director disqualifications.

The pair had been given the chance to come clean about their tax affairs when HM Revenue and Customs (HMRC) began a civil tax investigation in 2013.

They were offered the chance to pay what was owed plus a penalty through a formal civil process known as a Contractual Disclosure Facility (CDF) or a ‘COP9’. The COP9 process requires the taxpayer to make a “full, open and honest” disclosure or face a criminal investigation.

The men initially failed to respond and then provided only partial information, which resulted in a criminal investigation being launched in November 2016.

Investigators went on to prove that offshore companies in Gibraltar and the British Virgin Islands were controlled by the brothers and used to facilitate the tax fraud.

Zoe Gascoyne, deputy director, Fraud Investigation Service, HMRC, said: “Stephen and Michael Hirst had numerous opportunities to be honest about their tax affairs.

“Instead, they lied about the network of firms and ownership structures they had set up to commit fraud and have ended up with criminal convictions.

“We are pleased to have recovered every penny of the money they stole, which will now be used on the public services we all rely on.

“We continue to work tirelessly to ensure the tax system is fair to all and this case shows once again that we will work with international partners to ensure a level playing for all taxpayers.”

Andrew Fox from the Crown Prosecution Service said: “The defendants dishonestly manipulated the system and made every attempt to evade their tax liabilities.

“The amount of unpaid tax was substantial, and involved millions of pounds that should rightly have been paid into the public purse. We are pleased to have secured justice and the repayment of the tax.

“Our specialist prosecutors will continue to work closely with investigators such as HMRC to prosecute cases of tax fraud and bring perpetrators to justice.”

The Hirst’s ran a property development firm called TIMS Investments Ltd based in Wakefield.

In 2007 they transferred a large plot of UK land in Wakefield to a company of the same name in Gibraltar. This land, which has since been developed into a housing estate, was sold by the Gibraltar-based company for £10.9m.

The Hirst’s managed and controlled the Gibraltar-based firm from the UK. The brothers were not registered as owners of the firm, but controlled it via another company they owned in the British Virgin Islands, which was also named TIMS Investments Ltd.

They should have declared ownership of these companies and paid tax on the sale of the land – but they failed to do so and evaded £3.2m in corporation tax in the process.

The men pleaded guilty to charges of cheating the public revenue on July 18, 2023, and at a court hearing in January 2024 asked for sentencing to be deferred to give them time to repay the money. The total was paid on 4  June 2024.