What Happens If Your Tax Filing Is Late?

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Every year hundreds of thousands of taxpayers miss the midnight tax filing deadline on January 31 and worry about the fines and penalties they may have to pay.

Last year, around 760,000 late filers had to pay £76 million in fines.

The bad news is missing the deadline automatically generates a £100 fine, even if there is a zero tax liability unless the taxpayer has a reasonable excuse.

To be considered reasonable, excuses include the passing away of a close relative, an unexpected hospital stay, serious illness, technology failure or other delays that could not be predicted.

If you miss the deadline, the penalties are split into two categories – fines for not filing the return and charges for not paying any tax due.

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How self-assessment late penalties build

Although HM Revenue & Customs does not agree with or advertise the fact, the only other immediate charge is a 5% of the outstanding tax if the payment is 30 days late.

So, if your self-assessment return is late, the penalties due by March 1 are £100 plus 5% of any outstanding tax payment.

The next penalty period is April 30. From that date, HMRC charges a late filing fine of £10 a day for the next 90 days.

After six months – July 31, the fine is the highest of £300 or 5% of the tax due. This penalty is repeated if the tax filing is 12 months late.

What to do if your tax return is late

Sensible taxpayers would put the £100 automatic fine down to experience and ensure their tax return is submitted and any tax paid by March 1.

Even if the full figures are not known, it’s a good idea to file the return with the information that is available and make a payment of the estimated tax.

This stops the penalties accumulating until an amended return is filed with the correct figures.

At that stage, a tax balancing payment or credit – both with interest applied – may be due.

But taking this action is cheaper than letting the penalties build.

Find out more about the penalties of filing a self-assessment return late

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