Missing your Self Assessment deadline can cost you serious money. HMRC doesn’t send reminders or give warnings before hitting you with penalties. You’ll face automatic fines for late filing. You’ll also pay extra penalties for late payment. These are two separate charges that add up quickly.
The good news? You can avoid every single penalty by acting now. This guide explains exactly what happens when you’re late and how to fix it. We’ll cover filing deadlines, penalty amounts, payment options and appeals. Everything you need to know in plain English.
Don’t panic if you’ve already missed the deadline. There are still ways to minimise the damage and get back on track.
Let’s break down the Self Assessment penalty system step by step.
Self Assessment Filing Deadlines You Must Know
The deadline depends on how you submit your tax return. Online submissions give you more time than paper ones. Paper returns must reach HMRC by 31st October following the tax year. That’s the tax year ending on 5th April.
Online Self Assessment returns are due by midnight on 31st January. This gives you three extra months compared to paper filing. Want HMRC to collect your tax through PAYE? You need to file by 30th December instead.
Miss any of these dates and the penalties start immediately. HMRC’s system automatically generates fines without human intervention. The midnight deadline means exactly that. Filing at 00:01 on 1st February counts as late. Mark these dates in your calendar now. Set multiple reminders starting one month before each deadline. Most people file online because it’s faster and you get instant confirmation. The system also calculates your tax bill automatically.
How Much Are Self Assessment Late Filing Penalties?
HMRC charges £100 immediately if you miss the filing deadline. This applies even if you owe zero tax. You get this penalty whether you’re one day late or one month late. The fine is automatic and non-negotiable.
Three months after the deadline, daily penalties start. You’ll pay £10 per day for up to 90 days maximum. That’s an extra £900 on top of the initial £100 fine. Your total penalty reaches £1,000 after three months. Six months late triggers another penalty. You’ll pay either £300 or 5% of the tax owed, whichever is higher.
Twelve months late brings the same penalty again. Another £300 or 5% of tax owed gets added. These penalties stack up on top of each other. They don’t replace previous fines, they add to them.
Example: You’re 13 months late with a £5,000 tax bill. You’ll pay £100 + £900 + £300 + £300 = £1,600 in filing penalties alone.
What If You Don’t Need to File Self Assessment?
HMRC expects a return from everyone registered for Self Assessment. They don’t know if your circumstances changed unless you tell them. You must notify HMRC if you no longer need to file. Use their online service or call them directly.
Failing to inform them means you’ll still get penalties. “I didn’t need to file” isn’t accepted as an excuse after the deadline.
Common reasons you might not need to file anymore:
- You stopped being self-employed
- Your untaxed income dropped below £1,000
- You no longer receive untaxed income above thresholds
Check the Self Assessment checker tool on GOV.UK. It tells you within minutes if you need to file. Don’t assume HMRC knows your situation changed. You must tell them proactively before the deadline passes.
Self Assessment Late Payment Penalties Explained
Payment penalties are completely separate from filing penalties. You can get both types at the same time. The payment deadline is also 31st January. Your tax bill and first payment on account are both due then.
30 days after the deadline, you’ll pay 5% of the outstanding amount. This is on top of the tax you owe. Interest starts accruing daily from 1st February at around 8% per year. This interest never stops until you pay. Six months late brings another 5% penalty. Twelve months late triggers a third 5% charge.
These percentages apply to whatever you still owe at each stage. If you’ve made partial payments, the penalty is on the remaining balance.
Example: You owe £10,000 and pay nothing. After 30 days you owe £10,500 plus interest. After 12 months you owe £11,500 plus accumulated interest. The interest compounds daily. Every single day adds more to your bill until you clear the debt.
Payment on Account and Related Self Assessment Penalties
Payments on account confuse many people. They’re advance payments towards next year’s tax bill. If your tax bill exceeds £1,000, you’ll make payments on account. You pay 50% in January and 50% in July.
The January payment includes three things: last year’s balance, first payment on account, and any adjustments. This catches people off guard. The July deadline for the second payment is 31st July. Miss this and you’ll face the same 5% penalties as January.
Many self-employed people forget about the July payment. They think everything’s done in January and get surprised by penalties. Set a reminder for July now. Don’t let this payment slip through the cracks six months after January.
If you think your income will drop, you can reduce payments on account. But if you’re wrong, you’ll owe interest on the difference.
Can’t Afford Your Self Assessment Tax Bill?
Time to Pay arrangements let you spread payments over several months. HMRC offers this to people struggling financially. You can set up a payment plan online if you owe less than £30,000. The process takes about 15 minutes.
You must have already filed your Self Assessment return. HMRC won’t discuss payment plans until the return is in. Payment plans typically spread over 6-12 months. You’ll still pay interest but you’ll avoid the 5% penalties.
Call HMRC on 0300 200 3822 if you owe more than £30,000. They’ll assess your situation and propose terms. Be honest about what you can afford. HMRC prefers realistic plans you’ll stick to over ambitious ones you’ll break.
Interest continues accruing throughout your payment plan. But this is much cheaper than penalties stacking up. Don’t ignore the problem hoping it will go away. HMRC can take enforcement action including bailiffs and court proceedings.
How to Appeal Self Assessment Penalties
HMRC sometimes waives penalties if you have a “reasonable excuse”. Their definition of reasonable is quite strict. Reasonable excuses include serious illness, bereavement, or unexpected hospitalisation. They must have prevented you from filing on time.
“I forgot” or “I was busy” don’t count. Neither does lack of money or not understanding the rules. You must appeal within 30 days of receiving the penalty notice. Use the SA370 form or the online appeal service.
Provide evidence supporting your excuse. Medical certificates, death certificates, or police reports help your case. If HMRC had technical issues preventing you from filing, that’s also valid. But you need proof like error messages or reference numbers.
Your accountant making an error isn’t your excuse. HMRC holds you responsible for your tax return regardless of who prepares it. Most appeals get rejected because people don’t meet the strict criteria. Don’t count on an appeal succeeding without strong evidence.
CONCLUSION:
Self Assessment penalties add up faster than you think. Late filing and late payment create two separate streams of charges. The best strategy is simple: file and pay on time every single year. Mark the 31st January deadline in multiple places.
Already late? File immediately to stop daily penalties accumulating. Then contact HMRC about a payment plan if you can’t pay. Don’t let embarrassment or fear stop you from sorting this out. HMRC prefers people who communicate and make arrangements.
Professional help can save you money in the long run. Accountants know which expenses you can claim and how to minimise your tax bill. Need assistance with your Self Assessment? Contact our team today for expert guidance and peace of mind.
