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Late Tax Returns And Penalties


Late tax returns, penalties and interest; what happens if you miss the tax return deadline

The longer you delay, the more you’ll have to pay. So it’s important to send your tax return online to HMRC as soon as you can. Missing the deadline is not an option anymore unless you have money to burn! The table below shows the penalties you’ll have to pay if your tax return is late.

Penalties for missing the tax return deadline

Length of delay Penalty you will have to pay
1 day late A penalty of £100. This applies even if you have no tax to pay or have paid the tax you owe.
3 months late £10 for each following day – up to a 90 day maximum of £900. This is as well as the fixed penalty above.
6 months late £300 or 5% of the tax due, whichever is the higher. This is as well as the penalties above.
12 months late £300 or 5% of the tax due, whichever is the higher.
In serious cases you may be asked to pay up to 100% of the tax due instead.
These are as well as the penalties above.

Example

Mrs A’s tax return is due on 31 January 2016 but HMRC doesn’t receive it until 5 August 2016.

It is over six months late so she will have to pay all of the following:

  • £100 fixed penalty
  • £900 penalty – this is £10 each day from 1 May to 29 July, when the maximum 90 day penalty is reached.
  • £300 or 5 per cent of the tax due – whichever is the higher.

Penalties for paying late

Length of delay Penalty you will have to pay
Thirty days late 5% of the tax you owe at that date
Six months late 5% of the tax you owe at that date. This is as well as the 5% above.
Twelve months late 5% of the tax unpaid at that date. This as well as the two 5% penalties above

The penalties above do not apply to any payments on account that you pay late.

Important

In addition to the above penalties you will also have to pay interest on any thing you owe and haven’t paid, including interest on any unpaid penalties, until HMRC receives your payment.

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