Penalties for late filing or payment

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What if you are late filing your return or paying your tax?

It is recommended that you file your return on time and pay the tax by the due dates. Failure to do this not only increases your risk of being picked by HMRC for an enquiry but can involve you being liable for the penalties and interest as shown below.

There is an automatic non-refundable penalty of £100 if the return is not filed by the due date (usually 31st January following the end of the tax year). If there is a reasonable excuse, the penalties will be waived.  A reasonable excuse does not include ignorance, negligence or someone else not preparing accounts or filing the return on time on your behalf.

If the return is more than three months overdue, there is a penalty of £10 for each further day that the return is late up to a maximum of 90 days.

If the return is more than six months late there will be a further penalty of £300 or 5% of the liability if this is higher. The daily penalties do not apply in the case of CGT returns.

If the return is filed more than twelve months after the filing deadline (i.e. 31st January 22 months after the end of the tax year for self assessment returns) there will be a further penalty of £300 or 5% of the liability if this is higher in addition to the penalty due for the previous 31st July. In serious cases, the penalty may be up to 100% of the tax due.

If you do not pay on time, interest runs on any amount paid late. There is also a 5% surcharge if the liability for the previous tax year is not paid by 30 days after 31st January following that tax year and a further 5% surcharge if it is not paid by the 31st July after that. If the tax is not paid by the following 31st January then there will be a third 5% surcharge.


What you do if you cannot pay?

Try to make an arrangement with HMRC. There is currently a Business Payment Support Service Helpline, their contact telephone number 0300 200 3835.


© Thandi Nicholls Ltd 2023 All Rights Reserved – The above articles are provided for guidance only and may not cover your personal circumstances so you should not rely on them. It is important that you seek appropriate professional advice which takes into account your personal circumstances where you can provide the full facts of the case and all documents related to your case. Thandi Nicholls Ltd t/a, S Thandi or M S Bains cannot be held responsible for the consequences of any action or the consequences of deciding not to act.

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