Penalties for Late Submission and Payment of Self-Assessment Tax Returns

Filing your Self-Assessment tax return and paying any tax owed on time is critical to avoid penalties from HM Revenue & Customs (HMRC). This article breaks down the penalties, key deadlines, and how to avoid falling into costly traps. There are separate penalties for non-filing and late payments, you could be subject to both.

Key Deadlines for Self-Assessment Tax Returns

• Paper submissions: 31st October following the end of the tax year.
• Online submissions: 31st January following the tax year.
• Payment deadline: 31st January.

Missing these deadlines can lead to significant penalties, so it’s important to plan ahead.

What Happens If You Miss the Deadline?

Late Filing Penalties

1. Up to 3 months late:
   • A fixed penalty of £100, even if no tax is owed.
2. Over 3 months late:
   • Daily penalties of £10, up to a maximum of £900.
3. Over 6 months late:
   • An additional £300 or 5% of the tax due (whichever is higher).
4. Over 12 months late:
   • A further £300 or 5% of the tax due. In serious cases, this may be increased to 100% of the tax owed.

Late Payment Penalties

• After 30 days: 5% of the tax owed.
• After 6 months: Another 5% of the tax still unpaid.
• After 12 months: Yet another 5% of the unpaid amount.

Additionally, HMRC charges daily interest on unpaid amounts at the current interest rate (currently 7%).

How to Avoid Penalties

1. File on time: Ensure you have all necessary records ready before the deadline.
2. Pay promptly: Make sure your tax liability is cleared by the payment deadline.
3. Set reminders: Use calendar alerts or reminders to keep track of key dates.
4. Contact HMRC early: If you face genuine difficulties, inform HMRC as soon as possible to avoid further penalties.

Appeals: Can You Challenge a Penalty?

You can appeal if you have a reasonable excuse, such as:

• A serious illness.
• Issues with HMRC’s online system.
• Postal delays beyond your control.

Ensure you provide evidence to support your appeal.

FAQs

What if I miss both the filing and payment deadlines?

You’ll incur both late filing and payment penalties. These accumulate quickly, so it’s best to act immediately.

What if I overpaid in the previous year?

Overpayments can sometimes be used to offset late payment penalties, depending on the situation.

Can TaxQube help with Self-Assessment?

Yes, TaxQube offers expert guidance to help you avoid penalties and ensure compliance. Contact us to enquire about our services.

Appoint TaxQube to manage your taxes

We help taxpayers in the UK to ensure compliance with HMRC – It is a legal responsibility. If you need help in submitting your Tax reports or accounts preparation, please do feel free to get in touch with us by completing the contact us form.