What are the Penalties for Missing the Tax Return Deadline?

If you miss your filing deadline of 31 Jan, you will face three types of charges –

  1. Penalties for not filing the return
  2. Penalties for not paying the tax owed to HMRC
  3. Interest on tax owed at HMRCs interest rate

Penalties are calculated according to the number of days late, and are added up cumulatively by HMRC.

Let’s assume it’s 1 February 2017, these are the charges faced if your 2015/2016 tax return is not filed and tax of £5,000 remains unpaid until 1 February 2018 at which point the missing return and tax owed is all correctly submitted but 12 months late:

On 1st February 2016:

Filing Penalty: £100

On 30 April 2016 (3 months late so far):

Filing Penalty: £10 per day (subject to a maximum of £900)

Unpaid Tax Penalty: 5% of tax due or £300, if greater

On 31 July 2016 (now 6 months late):

Filing Penalty: £300

Unpaid Tax Penalty: 5% of tax due or £300, if greater

By 31 January 2017 (12 months late):

Filing Penalty: £300

Unpaid Tax Penalty: 5% of tax due or £300, if greater

Based on this scenario total penalties amount to £2,350 plus interest, currently estimated at £150.

It is worth noting, that if the missing return and unpaid tax were both submitted just one day earlier on 31 January, this would have avoided the 12 month late penalty being imposed, saving £550.

After 12 months, or for more serious cases the taxpayer could be asked to pay 100% penalties of the tax due.

If you are struggling to pay your tax bill, HMRC may agree to accept instalments and penalties will be suspended.  

If a payment arrangement is agreed then you must stick to it. Missing a payment can void your arrangement and you could be liable to pay the full amount immediately.

If you’ve missed submitting your tax return or owe tax, use HMRC’s online calculator to work out how much you will owe in penalties and interest here.

Anita Forrest
About Anita Forrest

Anita is a Chartered Accountant with over a decade of working with small business owners. She is the creator of the ‘Go Self Employed’ website, where she simplifies complicated self-employment topics such as taxes, bookkeeping, banking and insurance.