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Late Tax Return Penalty

Late Tax Return Penalty

What is a Late Tax Return Penalty?

Understanding the Basics

A late tax return penalty is a fine imposed by HM Revenue and Customs (HMRC) when you fail to submit your tax return by the deadline. This penalty is designed to encourage timely filing and compliance with tax regulations.

Key Deadlines to Remember

  • Self-Assessment Tax Return: 31st January
  • Corporation Tax Return: 12 months after the end of the accounting period
  • PAYE and National Insurance: 19th of each month (or 22nd if filed electronically)

Types of Penalties

  • Initial Fixed Penalty: £100 for missing the deadline.
  • Daily Penalties: £10 per day after three months, up to a maximum of 90 days.
  • Additional Penalties: 5% of the tax due or £300 (whichever is greater) for returns over six and twelve months late.

How Late Submission Penalties Are Calculated

Factors Influencing Penalties

Penalties are not one-size-fits-all and can vary based on several factors:

  • Length of Delay: The longer the delay, the higher the penalty.
  • Amount of Tax Owed: Larger tax liabilities can result in higher penalties.
  • History of Compliance: Repeat offenders face stricter penalties.

Example Scenarios

  1. One Month Late: Fixed penalty of £100.
  2. Six Months Late: Fixed penalty of £100 + £10 daily penalties up to 90 days + 5% of the tax due.
  3. Twelve Months Late: Fixed penalty of £100 + £10 daily penalties up to 90 days + 5% of the tax due + additional 5% of the tax due or £300.
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How to Appeal a Late Tax Return Penalty

Grounds for Appeal

If you believe your penalty is unjust, you can appeal to HMRC. Valid grounds for appeal include:

  • Serious Illness: If you or a close family member were seriously ill.
  • Bereavement: Death of a close family member.
  • Postal Delays: Proven delays in postal service.
  • Technical Issues: HMRC online system failures.

Steps To Appeal

  1. Gather Evidence: Collect documents supporting your case.
  2. Submit Your Appeal: Use HMRC’s online service or write a letter detailing your reasons.
  3. Follow Up: Stay in touch with HMRC and respond promptly to any requests for additional information.

Tips to Avoid Late Tax Return Penalties

Organise Your Records

Maintaining well-organised financial records throughout the year simplifies the tax filing process. Use accounting software to keep track of income, expenses, and other critical information.

Set Reminders

Set calendar reminders well before the deadline. Consider subscribing to HMRC’s email alerts for important tax deadlines and updates.

Use Professional Help

Hiring an accountant or tax advisor can ensure your tax return is accurate and submitted on time. They can also provide valuable advice on tax planning and compliance.

File Online

Filing your tax return online is faster and more efficient. HMRC’s online system provides immediate confirmation of submission, reducing the risk of postal delays.

Pay Any Tax Due Promptly

Even if you can’t complete your tax return on time, estimate and pay any tax due to avoid additional penalties and interest.


Filing your tax return on time is essential to avoid penalties that can escalate quickly. By understanding the penalties, how they are calculated, and ways to avoid them, you can ensure compliance with HMRC regulations. Stay organised, use professional help if needed, and always keep an eye on important tax deadlines.

For more detailed advice tailored to your specific situation, contact Business Helpline for expert guidance. Our 24-hour helpline is available to support you in managing your tax obligations effectively.

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    Andy Slinger

    Andy is Head of Marketing for Business Helpline with a wealth of experience Marketing in the financial sector. He has a passion for helping business owners struggling with debts.

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