Self Assessment Penalties

Missing Self Assessment deadlines can result in automatic penalties and interest charges. The amount you're charged depends on how late your tax return is filed and how long your tax bill remains unpaid. However, you may be able to appeal a penalty if you have a reasonable excuse.

Penalties for late filing

HMRC issues penalties automatically if you miss the Self Assessment deadline. The deadline for online returns is 31 January following the end of the tax year. For paper returns, the deadline is earlier: 31 October following the end of the tax year.

The penalty structure for late filing works as follows:

1 day late: £100 fixed penalty, even if you have no tax to pay or have already paid your tax
3 months late: £10 daily penalties for up to 90 days (maximum £900)
6 months late: £300 or 5% of the tax due, whichever is greater
12 months late: £300 or 5% of the tax due, whichever is greater (this is in addition to the earlier penalties)

If your return is more than 12 months late and you deliberately withheld information, HMRC may charge higher penalties based on the nature of the withholding.

Penalties for late payment

You'll also face penalties if you don't pay your Self Assessment tax bill by the 31 January deadline. These penalties are in addition to filing penalties if your return was also late.

The payment penalty structure is:

30 days late: 5% of the tax unpaid at that date
6 months late: Further 5% of the tax still unpaid at that date
12 months late: Further 5% of the tax still unpaid at that date

Interest on unpaid tax

As well as penalties, HMRC charges interest on any unpaid tax from the date it was due until the date you pay it. This applies whether or not you've also been charged a penalty.

If you appeal a penalty but don't pay it while your appeal is being considered, you'll have to pay interest on the penalty amount if your appeal is rejected. The interest runs from the date the penalty was due until the date you pay it.

If HMRC accepts your appeal and you've already paid the penalty, they'll repay what you paid with interest from the date you paid it (provided you don't have any other outstanding tax to pay).

What counts as a reasonable excuse

You can appeal against a penalty if you have a reasonable excuse for filing your return late or paying your tax late. HMRC will consider your individual circumstances when deciding whether your excuse is reasonable.

To appeal, you'll need to provide:

The date the penalty was issued
The date you filed your Self Assessment tax return (if you've submitted it)
The date you paid your tax (if you've paid it)
Details of your reasonable excuse for filing your return late or not making your payment on time

How to appeal a penalty

HMRC provides an online tool to check how to appeal a Self Assessment penalty for individuals or partnerships. Using this tool, you can either make your appeal online or download form SA370 or SA371 to appeal by post.

You should consider paying the penalty while your appeal is being reviewed. If you don't pay and your appeal is rejected, you'll owe interest on the penalty. If HMRC agrees with your appeal, they'll refund what you paid with interest.

If you shouldn't have received a penalty

If you've been sent a penalty notice but you don't actually need to send a Self Assessment tax return, you can ask HMRC to cancel the penalty. This might happen if your circumstances have changed and you're no longer required to complete Self Assessment.

What happens after you appeal

After you submit your appeal, HMRC will review it and send you a decision. If you disagree with the outcome of your appeal, you can ask HMRC to review the decision again, or you can take your case to an independent tax tribunal.

Avoiding penalties

The best way to avoid penalties is to:

Register for Self Assessment by 5 October if you need to complete a tax return and either haven't sent one before or didn't need to send one for the 2023 to 2024 tax year
Submit your return by the deadline (31 January for online returns, 31 October for paper returns)
Pay your tax bill by 31 January following the end of the tax year

You can submit your return any time after 5 April. Filing earlier means you'll know what you owe and can budget accordingly. If you're worried about paying on time, you can set up weekly or monthly payments to help spread the cost, or arrange a payment plan with HMRC if you're struggling to pay your bill in full.

Sources

This article provides general guidance based on current HMRC rules. For advice specific to your situation, speak to your accountant.