What Are the Penalties for Late Tax Returns?

Uncategorised
March 1, 2025

So, What Are the Penalties for Late Tax Returns?

Filing a tax return on time is essential to avoid penalties from HMRC. If you miss the deadline, you may face fines, interest charges, and even additional penalties for continued delays. Understanding what are the penalties for late tax returns? can help you act quickly to minimise costs and prevent further issues.

In this blog, I’ll explain the fines for late tax returns, how they increase over time, and what steps you can take if you miss the deadline.

1. What Is the Tax Return Deadline?

For most individuals filing a self-assessment tax return, the key deadlines are:

31st October – Deadline for paper tax returns.
31st January – Deadline for online tax returns and payment of any tax owed.

Missing these deadlines triggers automatic penalties, even if you don’t owe any tax.

2. Immediate Penalties for Late Tax Returns

If you fail to submit your tax return on time, HMRC applies the following penalties:

£100 Fixed Penalty (Day 1)

Applies the day after the deadline.
This fine is charged even if you have no tax to pay.

Daily Penalties (After 3 Months)

£10 per day, up to a maximum of £900.
This charge applies until you file your return.

6-Month Late Filing Penalty

Additional 5% of the tax due or a £300 fine, whichever is greater.

12-Month Late Filing Penalty

Another 5% of the tax due or £300, whichever is greater.
If HMRC believes you deliberately withheld information, the penalty could be up to 100% of the tax owed.

3. What If You Miss the Payment Deadline?

In addition to late filing penalties, failing to pay your tax bill on time results in additional charges:

5% of unpaid tax if not paid by 2nd March.
An additional 5% if unpaid after 6 months.
A further 5% if still unpaid after 12 months.

Interest charges also apply on overdue amounts until the full balance is cleared.

4. What to Do If You Miss the Tax Return Deadline

File Your Return as Soon as Possible

Even if you’ve missed the deadline, filing your return immediately stops further daily penalties from accumulating.

Contact HMRC If You Have a Valid Reason

HMRC may waive penalties if you have a reasonable excuse, such as:

A serious illness or hospitalisation.
The recent death of a close relative.
Major IT failures preventing submission.
Fire, flood, or theft affecting your records.

However, you must provide evidence and file as soon as possible.

Set Up a Payment Plan If You Can’t Pay

If you can’t afford to pay your tax bill in full, HMRC allows Time to Pay arrangements, letting you spread payments over several months. Applying early helps avoid additional penalties.

5. How to Avoid Late Tax Return Penalties

Keep Track of Deadlines

Mark key tax dates in your calendar and set reminders to ensure you file on time.

Organise Your Financial Records

Keeping records of income, expenses, and receipts throughout the year makes tax filing easier and faster.

Submit Your Return Early

Filing well before the deadline reduces stress and ensures any issues can be resolved without last-minute pressure.

Use an Accountant for Support

Professional accountants ensure your tax return is accurate and submitted on time, helping you avoid fines and penalties.

How TRW Accountants Can Help

At TRW Accountants, we help individuals and businesses file their tax returns on time and resolve any late filing issues. Our Kent based team can:

Submit overdue tax returns to minimise penalties.
Assist with penalty appeals if you have a reasonable excuse.
Set up payment plans with HMRC to manage outstanding tax bills.

Conclusion

Missing the tax return deadline results in automatic penalties that increase the longer you delay filing. If you’re wondering what are the penalties for late tax returns?, the answer is clear—£100 immediately, plus additional fines after three, six, and twelve months. However, acting quickly can prevent further charges. By staying organised, filing early, and seeking professional support, you can avoid costly mistakes and ensure compliance with HMRC.