Jessica O'ConnorHMRC data has revealed that self-employed workers on the lowest incomes are significantly more likely to miss the Self Assessment filing deadline than higher earners, with late filing rates nearly double those of additional and higher rate taxpayers.
The figures, obtained through a Freedom of Information (FoI) request submitted by PensionBee, cover tax years from 2019/20 to 2023/24.
In the most recent year, 5.9% of self-employed people earning below the basic rate tax threshold filed their tax return after the 31st January deadline.
This compared with 3.1% of basic rate taxpayers, 2.7% of higher rate taxpayers and 2.6% of additional rate taxpayers.
The pattern remained consistent across all five years of data, including during the pandemic years when HMRC temporarily waived late filing penalties for returns submitted before 28th February.
Overall, around 180,000 self-employed individuals filed late in 2023/24, although total late filing numbers have gradually fallen in recent years.
HMRC data showed that 94% of those filing late were either below basic rate or basic rate taxpayers.
PensionBee said the findings point to a wider knowledge and support gap among lower-income self-employed workers, many of whom manage their finances without accountants or advisers and face greater income volatility.
The company also highlighted concerns around retirement savings, citing separate research showing that almost three in four self-employed workers without a pension are unaware that pension contributions receive tax relief.
Lisa Picardo, chief business officer UK at PensionBee, said: “Late filing of Self-Assessment tax returns is not evenly spread across the self employed population.
“It’s heavily concentrated among those on lower incomes, many of whom sit within what we describe as the ‘invisible workforce’.
“For many of these workers, unpredictable income and limited support make it genuinely harder to stay on top of financial administration and obligations, whether that is filing a tax return or saving into a personal pension.
“Missing the deadline is often a symptom of a wider pressure that the system does not adequately account for.”
She added: “It also highlights a broader risk. Those with earnings below the basic rate threshold are the group that Auto-Enrolment was never designed to reach.
“They are managing their finances alone, often without additional support or safety nets to fall back on.
“If we are serious about supporting the smallest businesses, closing this administrative gap has to be part of the conversation.”
