Late filing penalties
GOV.UK sets out four tiers of penalty for a late return under the current rules:
- Straight away: an initial £100 penalty, even if you owe no tax.
- After 3 months: additional daily penalties of £10 a day, up to a maximum of £900.
- After 6 months: a further penalty of 5% of the tax due or £300, whichever is greater.
- After 12 months: another 5% or £300, whichever is greater.
Late payment penalties
Paying late is penalised separately from filing late. HMRC charges 5% of the tax unpaid at three points: 30 days, 6 months and 12 months after the due date. You are also charged interest on the amount owed from the due date until it is paid.
What this can add up to
Because the filing and payment penalties run independently, a return that is a year late with tax unpaid can attract penalties in both categories at once, on top of interest. Filing on time even when you cannot afford to pay avoids the filing penalties entirely, and lets you talk to HMRC about a payment plan.
Appealing a penalty
You can appeal if you had a reasonable excuse for filing or paying late, such as a serious illness, a bereavement, or a failure in HMRC's own systems. Appeal as soon as you can and keep evidence. Simply being unaware of the deadline, or not having the money, is not usually accepted on its own.
These rules are changing
The figures above are the rules currently set out on GOV.UK. HMRC has announced a move to a points-based system for late submissions for Income Tax Self Assessment alongside reformed late payment penalties, phased in alongside Making Tax Digital. Check GOV.UK for the position that applies to the return you are filing.
Need a hand with your return?
We prepare and file Self Assessment returns for directors, sole traders and landlords, and tell you exactly what is due and when before anything is submitted. Call 0114 327 1480.