How Much Will HMRC Fine For A Late Self Assessment?

The self-assessment tax return deadline is quickly approaching. A large amount of the people who are required to file their returns have still not yet completed them.

The deadline for online filing is the end of January, but if you’re filling for the first time you will need your taxpayer reference which is sent through the post and will take longer.


How Much Do HMRC Fine For Late Submissions?

We thought we’d offer some interesting insight regarding the fines that HMRC can give out if someone doesn’t file their return.

HMRC have 3 levels of fines:

Initial Penalty: £100 for the first 3 months

If you fail to file your return before the deadline then HMRC can impose a £100 fine within the first 3 months. The fine is handed out on a strict basis, and there is very little room for reasonable excuses.

Here are the 8 reasons HMRC would consider rescinding their fine:

  • Your partner or a close relative died shortly before the deadline.
  • You were unexpectedly taken to hospital that prevented you from submitting.
  • You had a serious or life threatening illness.
  • Your computer or software failed while you were preparing your online return.
  • You experienced service issues with HMRC’s online services.
  • A fire, flood, or theft prevented you from completing your return.
  • Unpredictable postage delays
  • You have a disability that caused delays.

Ongoing Penalty: £10 For Everyday The Returns Aren’t Filed

This is the moment when the fine can accumulate quickly. The fine is then kept against your name and will increase by £10 for everyday that the return isn’t filed.

A £10 increment is ongoing for a further 90 days. The fine is then capped at £900 pounds.


Maximum Penalty: Tax Appropriate Penalties

After the first 3 months HMRC will have issued a £100 fine, and over the next 90 days up to a further £900 fine.

At this point the big 6 month fine kicks in, where HMRC apply a tax geared penalty at 5% of the liability of the return. This carries a minimum fine of £300.

However if you’ve still not submitted your return HMRC will class you as withholding information.

Depending on how deliberate your actions are the fine will increase from 5% of the liability return to 70% or more.


Reminder

That’s a massive amount of money that can stunt a business’ growth.

The deadline for online filing is the end of January, and if you’re filling for the first time you will need your taxpayer reference which is sent through the post.

If you’re yet to file your return, or know of someone who is struggling with the process – you can put them in touch with us below.

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