Filing your tax return late – or missing the payment deadline – can land you with some hefty self assessment late payment penalties from HMRC.
These charges apply even if you’re only a day late, and they grow the longer you leave it.
Every year, high numbers of taxpayers miss the 31 January deadline. In 2024, more than 1.1 million people failed to submit their tax return on time, according to the BBC.
If you’re self-employed or submit a tax return for any other reason, it pays to know the rules.
Key takeaways: Self-assessment penalties
- File late and you could be hit with a £100 fine, even if you owe nothing
- Daily penalties of £10 kick in after 3 months (up to £900 total)
- Pay late and HMRC adds penalties starting at 5% of your tax bill after 6 months
- Interest is charged from the day after the deadline
- Using a professional accountant can help avoid costly mistakes
What are self assessment late payment penalties?
If you work for yourself or earn income outside of PAYE – such as from freelancing, property, or investments – you’re likely required to file a Self Assessment tax return.
The deadline for submitting your return online is midnight on 31 January, and the same date applies to paying any tax you owe. Miss either deadline and HMRC will issue self assessment penalties.
These fall into two categories:
- Late filing penalties – for submitting the return after the deadline
- Late payment penalties – for paying the tax bill late
Many people mistakenly think they’re in the clear if they owe nothing. But the late filing penalty applies no matter what – even if your tax liability is zero.
How much are the penalties?
Self Assessment penalties aren’t just a slap on the wrist – they stack up quickly and can catch people off guard.
Self assessment late filing penalties
The moment you miss the 31 January deadline, a fixed £100 penalty applies, regardless of whether you owe tax. That charge stands even if you’re only one day late.
If the return still isn’t filed after three months, HMRC adds a daily penalty of £10. This continues for up to 90 days, meaning you could be hit with an extra £900 in charges.
Six months after the deadline, HMRC increases the pressure with another penalty – either £300 or 5% of the tax you owe, whichever is greater. This repeats if the return is 12 months late, potentially doubling the total.
To put this into context: if you owe £2,000 in tax and file your return more than a year late, you could face:
- £100 initial penalty
- £900 in daily penalties
- £300 at the six-month mark
- Another £300 (or more) after 12 months
That’s £1,600 in self assessment tax return penalties, before any late payment charges or interest.
Self assessment late payment penalties
Missing the payment deadline triggers a different set of penalties. If you haven’t paid the full amount by 2 March (30 days after the deadline), HMRC charges 5% of what you owe.
Another 5% is added if the bill remains unpaid after six months, and a final 5% if it’s still unpaid after 12 months. That’s potentially 15% of your tax bill in penalties alone.
Using the same £2,000 example: if you paid nothing until 12 months after the deadline, you’d face £300 in late payment penalties. Add interest and the final figure climbs even higher.
Unlike the late filing penalties, these are based entirely on the amount of tax unpaid, so the higher your bill, the more you’ll be charged.
Late filing vs late payment: What’s the difference?
It’s easy to confuse filing and payment deadlines – but HMRC treats them separately.
Let’s say you submit your return on time, but don’t pay the tax until March. You’ll avoid a late filing fine but still face late payment penalties and interest. On the other hand, paying on time but forgetting to file will still trigger the £100 fine and more if the delay continues.
Both deadlines matter. Ideally, you want to file and pay by 31 January to avoid any penalties.
Think you’ve overpaid tax in a previous year? You might be able to claim it back through the HMRC overpayment relief claim process but there’s a catch – a strict time limit.
What counts as a reasonable excuse?
There are situations where HMRC may waive penalties – but their list of acceptable excuses is narrow.
Examples that might qualify include:
- A serious illness or accident close to the deadline
- Bereavement of a close relative
- Fire, flood or technical failure that stopped you from filing
They won’t accept:
- Being too busy
- Forgetting the deadline
- Problems with your accountant
- Not receiving a reminder
If you believe you had a valid reason, you’ll need to appeal and provide evidence. The sooner you do it, the better your chances.
How to avoid or reduce penalties
The best advice is to file early, even if you don’t yet have the full amount to pay. That way, you avoid late filing penalties and give yourself time to sort the payment.
If you’re struggling to pay, you can contact HMRC to arrange a Time to Pay agreement, which allows you to spread the cost in monthly instalments. You’ll still pay interest, but it can help you avoid additional penalties.
The easiest way to stay compliant is to work with a qualified accountant. They can remind you of deadlines, handle the paperwork, and help you avoid errors that could lead to fines. Here at Accountants East London, we’ve helped hundreds of clients file on time and deal with HMRC – it’s at the core of our services.
Our Self Assessment tax return service takes the stress out of the process – especially if you’re self-employed or managing multiple income sources. You might be wondering how much tax you pay on a second job, for example – we’ve got you covered.
FAQs: HMRC warns of fines and penalties for late self assessment tax return submissions
What is the maximum penalty for filing a late tax return?
If your return is more than 12 months late, you could be fined up to 100% of the tax owed – effectively doubling your bill.
How are HMRC penalties calculated?
Filing penalties are based on how late the return is. Payment penalties are calculated as a percentage of the tax owed, plus daily interest.
How late can you pay self assessment tax?
There’s no cut-off, but penalties and interest increase the longer you delay. It’s always better to contact HMRC early to set up a payment plan.
What is a reasonable excuse for late tax payment?
Events outside your control, such as serious illness or technical failure, may qualify. Forgetting or not understanding the rules won’t count.
How is late payment penalty calculated?
It’s 5% of the unpaid tax after 30 days, another 5% after 6 months, and another 5% after 12 months. Interest is added on top.
How much is the fine for late tax payment in the UK?
The penalty is 5% of what you owe after 30 days, plus more after 6 and 12 months. See the latest interest rates for late payments from HMRC.
Final thoughts – late payment penalties: Self assessment
Missing the Self Assessment deadline can be costly – both in terms of money and time. Penalties build fast, and even one small slip can snowball into a bigger problem.
If you want peace of mind, it’s worth speaking to a professional accountant. Here at Accountants East London, we help clients stay penalty-free with timely, accurate submissions and clear advice tailored to their situation.
Whether you’re new to Self Assessment or just tired of the paperwork, we’re here to help. Contact us for a no-obligation chat today.
