Self Assessment tax returns: what are the HMRC penalties for filing late?
If you need to file a 2023/24 Self Assessment (SA) tax return, you are probably aware that the 31st January 2025 online filing deadline is fast approaching. So what happens if circumstances mean that you can’t make the deadline?
Liam Coulter, Tax Director at Wilson Nesbitt, explores what it means for you if you miss the deadline and what you can do if you find yourself in this position.
Self Assessment Penalties
If you receive a tax return, you are legally obliged to complete it, even if you think it is not relevant to you. If you don’t submit a completed tax return on time, a late filing penalty applies.
What HMRC tax penalties could I face for filing my tax return late?
Tax penalties apply for the late filing of SA tax returns and late payment of tax due under SA.
Late filing
Even if you pay your tax bill on time, your late filing penalty will not be reduced. This means that if you pay the amount you owe by the due date, or even if you don’t owe any tax at all and you submit your tax return late, HMRC will still charge you a late filing penalty.
A summary of the late filing penalties are shown below.
| Late Filing | Penalty |
| Missing the deadline | £100 |
| 3 months late | Daily penalty of £10 per day for up to 90 days (max £900) |
| 6 months late | 5% of tax due or £300, if greater |
| 12 months late | 5% or £300 if greater, unless the taxpayer is held to be deliberately withholding information that would enable HMRC to assess the tax due. |
| 2 months & taxpayer deliberately withholds information | Based on behaviour: deliberate and concealed withholding – 100% of tax due, or £300 if greater.deliberate but not concealed – 70% of tax due, or £300 if greater. Reductions apply for prompted and unprompted disclosures and telling, giving and helping. |
Late filing penalties can be a mixture of fixed-rate and tax-geared penalties, depending on your degree of lateness and tax liability.
Another important point to be aware of is that interest is charged on both unpaid tax and unpaid penalties.
What happens if I’m late paying my HMRC Self Assessment tax bill?
In addition to the penalties for late filing, you will be penalised by HMRC if you do not pay your tax bill on time.
Late payment
Penalties for the following are all tax-geared:
- Late payment
- Failure to notify
- Penalties: errors in a return and documents
‘Tax-geared’ means that if no tax is due or outstanding, then no penalties apply.
A summary of the late payment penalties are shown below:
| Late Payment | Penalty |
| 30 days late | 5% of tax due |
| 6 months late | 5% of tax outstanding at that date |
| 12 months late | 5% of tax outstanding at that date |
Example
You missed the deadline for filing your 2022/23 Tax Return (due date 31st January 2024) and submitted the return on 31st October 2024, owing and settling £2,000 on this date (which should have been paid by 31st January 2024).
| Late filing penalty | £1,300 | (£100 + £300 + £900) |
| Late payment penalty | £200 | (5% x £2,000 = £100 x 2) |
| HMRC interest | £114.71 |
Not filing and paying the tax on time has cost you an extra £1,614.
Self Assessment tax returns: is there anything I can do if I file and pay late?
Lodge an appeal
If there are exceptional circumstances that explain why you missed the tax return filing deadline, you can appeal against the penalty. You have 30 days to lodge an appeal with HMRC once the penalty has been issued.
HMRC will accept what they call a “reasonable excuse” for late filing once a proper appeal has been lodged.
A reasonable excuse is something that stopped you meeting a tax obligation for a valid reason; for example:
- Your partner or another close relative died shortly before the tax return or payment deadline
- You had an unexpected stay in hospital that prevented you from dealing with your tax affairs
- You had a serious or life-threatening illness
- Your computer or software failed while you were preparing your online return
- Issues with HM Revenue and Customs (HMRC) online services
- A fire, flood or theft prevented you from completing your tax return
- Postal delays that you could not have predicted
- Delays related to a disability or mental illness you have
- You were unaware of or misunderstood your legal obligation
- You relied on someone else to send your return, and they did not
The following wouldn’t be considered a reasonable excuse by HMRC:
- Your cheque bounced or payment failed because you did not have enough money
- You found the HMRC online system too difficult to use
- You did not receive a reminder from HMRC
- You made a mistake on your tax return
Negotiate a Time to Pay arrangement
Under a Time to Pay (TTP) arrangement, you can set up a payment plan with HMRC to spread the cost of your outstanding liabilities.
There is no ‘standard’ Time to Pay arrangement, as HMRC will look at your financial position based on what you can afford and how much time you need to pay.
A Time to Pay arrangement can cover all amounts overdue, including penalties and interest.
SA taxpayers can ask for Time to Pay online, without calling HMRC, if:
- You owe £30,000 or less
- Do not have any other payment plans or debts with HMRC
- Your tax returns are up to date
- It’s less than 60 days after the payment deadline
- You plan to pay off your debt within 12 months
In other cases, it is necessary for you to call HMRC.
Minimising the impact of late filing: make a payment to HMRC
If you know you won’t be able to get your tax return submitted on time, estimate what you owe and make that payment by the due date.
If your estimate is right and all tax has been paid on time, this will reduce the late payment penalties (but will not avoid late filing penalties).
Keep copies of correspondence
You can protect your position if you routinely keep copies of forms and correspondence sent to HMRC, and keep ‘proof of posting’.
If extraordinary circumstances prevent you meeting deadlines, keep any evidence you can and make sure you inform HMRC as soon as possible.
Need help dealing with your HMRC tax liabilities? Contact Wilson Nesbitt
Sometimes in life, other things can take priority and you end up missing your filing/payment deadlines. Our experienced tax team at Wilson Nesbitt is here to help and can guide you through the self assessment process.
Get in touch with us on 0800 840 9293.