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What are late Self Assessment penalties?

January 12, 2022

Whether you didn’t realise you needed to file, or the deadline completely slipped your mind, unfortunately there’s a high chance you’ll be fined by HM Revenue and Customs (HMRC) for missing the Self Assessment deadline.

This isn’t to say a fine from HMRC is inevitable. Of course, there are a fair few scenarios classified as “reasonable excuses” that can enable you to file your Self Assessment past the deadline without needing to pay any extra.

However, in the unlucky scenario you do find yourself faced with the chance of late filing or payment penalties, there are steps you can take to soften the blow to your cash flow.

In this guide we’ll be covering everything you need to know about Self Assessment tax penalties, from what you could be fined for, to what the deadline extensions for the 2020/21 filing could mean for you.

What are the Self Assessment penalties?

If you completely miss the Self Assessment deadline, you might find yourself facing two different fines: one for not filing your Self Assessment tax return that determines the total amount of Income Tax due, and one for not paying your Self Assessment tax bill on time.

Penalties for missing the Self Assessment tax return deadline

If your tax return is up to 3 months past the filing deadline, HMRC will first fine you a late filing penalty of £100 with interest.

If you still haven’t filed your tax return after the 3 month mark has passed, you’ll then be charged daily penalties at £10 a day for up to 90 days, only stopping once you’ve finally submitted your outstanding tax returns — for instance, you’ll be fined £110 if you file your Self Assessment after 3 months and 1 day.

However, if you allow the full 90 days to pass before submitting your tax return, you’ll have accrued an eye-watering £1000, so be sure to act quickly.

Penalties for missing the Self Assessment payment deadline

Even if you file your Self Assessment tax return before the deadline, you can still get fined for not paying your Income Tax bill in its entirety. This means that even if you have almost completely paid your bill, you’ll still be charged with late payment penalties.

Unlike the penalties for late filing penalties, late payment penalties are determined by the outstanding balance on your tax bill. If you haven’t paid your tax bill within 30 days of receiving your penalty notice, you’ll be fined an extra 5% on top of what you owe, increasing by another 5% at the 6 month deadline and an additional 5% after a year.

Late filingLate paymentPenalty
Missed deadline£100
30 days late5% of tax due
3 months£10 per day for 90 days
6 months5% of tax due or £300 (whichever is greater)
6 months5%
12 months5% of tax due or £300 (whichever is greater)
12 months5%

When will I start getting penalties?

As the deadline for submitting and paying your Self Assessment typically falls on 31st January at midnight, any time after this deadline has passed — even by just a minute — will result in late submission and late payment penalties.

What are the Self Assessment deadlines for the 2020/21 tax year?

In an effort to lessen the financial burden on small businesses already under strain due to the coronavirus pandemic, HMRC has announced there will be no filing penalty for self-employed taxpayers submitting their Self Assessment if they file by 28th February 2022.

Self Assessment taxpayers, including sole traders and limited company directors, will also not be charged any late payment penalties if their tax bill has been paid, or if an agreed payment plan with HMRC has been set up, by 1st April 2022. Once these dates have passed, however, the regular penalties outlined above will resume.

To help you visualise these changes, we've put everything you need to know about the changes in our table below.

Table showing the deadline extensions for the tax year 2020/21, the filing and payment penalties and if the deadline extension includes APR

Despite this extension, HMRC has announced that interest will still be charged on all filings and payments made after the January deadline has passed, so be sure to file early if you can to avoid paying more than you have to.

How much will I need to pay in interest?

Interest is currently 2.6% APR (Annual Percentage Rate), and works out at around 0.2% of your tax bill if you file before 1st March 2022.

Summary

While missing the Self Assessment deadline isn’t ideal, it doesn’t have to be catastrophic. By taking action early, you can minimise the chance of accruing further penalties, saving you a lot of time, money and stress in the future.

If you’re really stuck, Ember can help. Our in-house accountants can file your Self Assessment for you, while access to the Ember app provides the tools you need to safely store and organise your finances in preparation for next year.

Join us in creating the new age of accounting.

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Daniel Hogan

Daniel is a Deloitte-trained, fully qualified Chartered Accountant with experience in the finance software space. It was during his tenure managing a finance system in the UK that he grew dissatisfied with the lack of synergy and automation in the space, compelling him to co-found Ember.