HMRC Late Filing Penalties
If the 31 January self assessment/tax return deadline is missed, HMRC will automatically issue a £100 penalty irrespective of whether any tax was actually due to be paid. Late filing penalty letters are issued in mid-February and normally start to land on doormats at the end of February and early March. We’re not quite sure why it takes so long for HMRC mail to arrive in the post, but that is another matter!
Additional penalties at £10 per day will start to be charged once the tax return becomes more than three months late, i.e., from 1 May for online returns. The daily penalty can be charged for a maximum of 90 days, i.e., until 31 July at which point £900 of penalties will have accrued in addition to the initial £100 penalty. A further £300 penalty will be charged when the tax return becomes six months overdue and again when it becomes 12 months overdue. A maximum penalty of £1,200 could therefore be charged if a self assessment is not submitted and interest charges on any tax payments that should have been made by 31 January will also be incurred.
If you receive a penalty notice, it is important to take action as soon as possible to avoid further penalties being charged. First and foremost, this would mean preparing and filing your tax return by 30 April. If you believe that you shouldn’t be in the self assessment system and don’t need to file a tax return, contact HMRC on 0300 200 3310 as soon as you can to explain why you don’t need to submit a tax return and they should then withdraw the self assessment request and cancel the penalty.
If you should have completed a tax return but believe you have a ‘reasonable excuse’ for not doing so, you can appeal the penalty here and would normally have to do so within 30 days of the penalty notice, though given the delay in penalty letters actually reaching individuals, HMRC do often give more time to appeal. We recommend that the tax return is filed first before appealing the penalty to give you a greater chance of success in your appeal. HMRC consider reasonable excuses to be something unexpected or outside your control that prevented you from preparing the tax return and settling any tax liabilities such as the death of a close relative or being diagnosed with a serious illness.
If you need assistance with your tax return and/or appealing the penalty please contact us and we will gladly help.
