Guides / Late tax return penalties
Guide
Late tax return penalties
What HMRC charges when a Self Assessment return or payment is late, how the penalties build up, and what you can do to reduce or challenge them.
7 min read · Updated October 2026 · Reviewed by qualified accountants
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In short
- The late filing penalty starts at £100 the day after the deadline, even if you owe no tax.
- Daily penalties of £10 apply after three months, up to £900.
- Further penalties arise at six and twelve months.
- Late payment adds interest and separate percentage penalties.
- You can appeal if you had a reasonable excuse, and ask for a payment plan if you cannot pay in full.
Penalties for filing late
HMRC applies penalties for a late Self Assessment return automatically. They build up in stages:
| How late | Penalty |
|---|---|
| 1 day late (after 31 January) | £100 fixed penalty |
| 3 months late | £10 a day for up to 90 days, a maximum of £900 |
| 6 months late | £300 or 5% of the tax due, whichever is higher |
| 12 months late | Another £300 or 5% of the tax due, whichever is higher |
The £100 penalty applies even if your return shows no tax to pay. In serious cases of deliberately withholding information, the 12-month penalty can be higher.
Penalties and interest for paying late
Paying your tax late is penalised separately from filing late.
- Interest is charged on unpaid tax from the due date until you pay. HMRC sets the rate, which is based on the Bank of England base rate plus 4%.
- 30 days late: a penalty of 5% of the tax unpaid at that point.
- 6 months late: a further 5% of the tax still unpaid.
- 12 months late: another 5% of the tax still unpaid.
A worked example
Imagine you owe £3,000 and file and pay seven months late.
- Late filing: £100 after the deadline, £900 daily penalties after three months, and £300 at six months (5% of £3,000 is £150, so the £300 minimum applies). That is £1,300 so far.
- Late payment: 5% of £3,000 at 30 days (£150) and another 5% at six months (£150), plus interest.
The total in penalties alone is around £1,600 on a £3,000 bill, which is why filing quickly matters so much. You can estimate your own figure with our late penalty calculator.
Do the sums
The quickest way to limit the cost is to file now, even if you cannot pay everything yet.
What counts as a reasonable excuse?
HMRC can cancel penalties if you had a reasonable excuse for the delay. Examples that HMRC accepts include:
- a serious or life-threatening illness, or a hospital stay
- the death of a partner or close relative shortly before the deadline
- a fire, flood or theft that destroyed records
- a computer or software failure that stopped you filing online
- postal delays that were outside your control
Forgetting the deadline, being too busy or not having enough money to pay are generally not accepted. You must file as soon as the problem is resolved.
How to appeal a penalty
You normally have 30 days from the date on the penalty notice to appeal. You can appeal online through your HMRC account or by letter. Explain what happened, when, and what you did to put it right. If HMRC rejects your appeal you can ask for an independent review and, if necessary, go to the tax tribunal. We can help you prepare an appeal.
What if you cannot pay the bill?
Filing your return on time is always the priority, even if you cannot pay everything. If you cannot pay in full, contact HMRC as early as possible to ask about a Time to Pay arrangement, which lets you pay in instalments. Interest still builds, but you avoid further enforcement action.
What happens if you ignore HMRC?
If you do not file after being told to, HMRC can issue a tax determination, which is their own estimate of your tax. This is usually higher than what you would owe and becomes payable until you file a correct return. Overdue returns are best dealt with quickly, and we prepare late returns for any previous year.
Written and reviewed by the Accotax tax team
Accotax is a London firm of qualified accountants and tax consultants, on the ICAEW approved employers list. Our team prepares Self Assessment, landlord and company tax returns every day, and each guide is checked against GOV.UK before it is published and updated every tax year.
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Is Cheap Tax Returns authorised and regulated? Yes.
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Questions, answered.
Yes, and you should file as soon as you can. Penalties keep rising until the return is submitted.
We can file your overdue return and advise whether an appeal has a realistic chance.
Penalties apply to each late return, so if several years are overdue each tax year can attract its own penalties.
Yes. The £100 late filing penalty applies even when no tax is due.
Penalties still apply, but filing quickly stops further daily and percentage penalties from building up.
Time limits depend on the behaviour involved. Generally four years, up to six for careless errors and twenty for deliberate behaviour.
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