Self Assessment Penalties

HMRC tax return

No one wants to get a self-assessment penalty of fine but sometimes life can get in the way and it is unavoidable or in other cases you simply forget.

It is important to understand the structure and the way HMRC works out the fine. If you are not careful the fines can quickly add up to an eye watering figure.

HMRC charge penalties for both late filing of the return and also late payment of the tax liability due and you can even be charged interest on the tax amount due.

So let’s have a look at how the fines are structured:

Miss the deadline

The deadline to file your tax return online and pay the tax amount due is the 31st of January each year.

If you miss the deadline by even a few minutes then you are given an automatic penalty of £100. This year HMRC have said that if you can provide a reasonable excuse as to why it is late then they will waive this penalty.

You have 30 additional days in order to pay the tax liability due. Once the tax due is over 30 days then you will be charged a 5% penalty of the outstanding tax liability.

3 months late

Once your tax return becomes over 90 days late you will incur a daily fine of £10 up to a maximum of £900.

You will also receive an additional penalty of 5% of the outstanding tax due.

6 months late

A return which is six months late then triggers yet another fine and this is the higher of £300 or 5% of the outstanding liability.

A penalty is also given again on not paying the tax and it at 5% of the outstanding liability.

12 months late

Once you hit the 12 months late date once again you get a fine of £300 of 5% of the liability. If HMRC believe that the tax payer is deliberately withholding information then at this point they may assess the total tax due.

You will then incur additional fines depending on whether HMRC feels your actions are deliberate.

Late filing example

Claire owed £100 in tax and simply forgot to file her return because she went on holiday to Australia. She then finally filed her returns a year late.

What penalties will she incur?

Late filing penalties:

Up to 3 months late: £100

6 months late: £900

9 months late: £300

12 Months late: £300

So in total for simply forgetting to file the short tax return online she will be fined £1,600.


Late payment penalty:

30 days late: £100 x 5% = £5

6 months late: £105 x 5% = £5.25

12 months late: £110.25 x 5% = £5.51

Total late payment penalty is £100 of the tax liability + £15.76 = £115.76.


So for simply forgetting to file your small £100 fine if you are not careful you can find yourself paying a massive £1,715.76 in penalties and fines!


The moral of this story is: get your tax return in early! If you want to beat the January rush and get your return done with plenty of time to relax give us a ring on 01202 331713.

Xero certified Accountant and ICAEW Chartered Accountant

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