HMRC imposes separate penalties for missing the filing deadline and for paying your tax bill late. These penalties can add up quickly, even if no tax is owed — so it's important to understand how they work.

 

Late Filing Penalties

If you miss the deadline for submitting your Self Assessment tax return (usually 31 January for online filing), HMRC applies the following penalties:

• 1 day late: £100 fixed penalty — applies even if no tax is due

• 3 months late: £10 per day for up to 90 days (maximum £900)

• 6 months late: Additional £300 or 5% of the tax due (whichever is greater)

• 12 months late: Another £300 or 5% of the tax due (whichever is greater)

• Deliberate withholding: Penalties can reach up to 100% of the tax due

💡 These penalties apply regardless of whether you’ve paid your tax — filing late triggers them automatically.

 

Late Payment Penalties

If you file your return on time but don’t pay your tax bill by 31 January, HMRC charges:

• 30 days late: 5% of the unpaid tax

• 6 months late: Another 5% of the unpaid tax

• 12 months late: A further 5% of the unpaid tax

Interest is also charged daily on the outstanding amount — currently at 7.75%.

 

Can You Appeal?

Yes — if you have a reasonable excuse, such as serious illness, bereavement, or technical issues, you can appeal the penalty. HMRC reviews each case individually.

🧮 Example

If you owe £2,000 and file your return 6 months late, and pay 6 months late:

• Filing penalties: £100 + £900 + £300 = £1,300

• Payment penalties: 5% of £2,000 = £100

• Total penalties: £1,400, plus interest

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Future Changes- Making Tax Digital

The Making Tax Digital (MTD) reforms are bringing in a new penalty system for late submissions and late payments — designed to be fairer, more consistent, and more proportionate than the current regime. Here's what’s changing:

 

Late Submission Penalties – Points-Based System

Instead of automatic fines, HMRC will issue penalty points for each missed submission. Once you reach a threshold, a £200 fixed penalty is triggered.

• Annual submissions (e.g. final declaration): 2 points = £200 penalty

• Quarterly submissions (e.g. MTD updates): 4 points = £200 penalty

• Monthly submissions: 5 points = £200 penalty

Points reset after a period of compliance:

• 24 months for annual filers

• 12 months for quarterly filers

• You must also submit any outstanding returns from the previous 24 months

 

Late Payment Penalties – Two-Stage System

MTD introduces a two-part penalty for late tax payments:

1. First charge:

   • 3% of the unpaid tax if not paid within 15 days

   • Another 3% if still unpaid after 30 days

2. Second charge:

   • Begins on day 31

   • Accrues daily at 10% per year until the tax is paid

💡 Interest is also charged separately — currently at 7.75% — and continues until payment is made

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Missing a filing or payment deadline doesn’t just cost you money — it creates stress and uncertainty. Whether you're filing for the first time or catching up on previous returns, we’re here to make sure you stay ahead of HMRC’s deadlines and avoid costly penalties.

Get in touch for a free consultation today!