What is a failure to notify

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In simple terms, Failure to Notify is when you start earning money on your own (self-employment) but do not tell HMRC about it by the deadline.

If you started your business in the last tax year and didn’t register for Self Assessment by 5 October of the current year, you have committed a “Failure to Notify.” You are now technically trading without HMRC’s permission, and you may face penalties.

Here is why this matters and how to fix it without panicking.

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The Deadline You Missed

When you start a business, HMRC gives you a “grace period” to get your affairs in order. You are supposed to register by 5 October in your business’s second tax year.

• The Rule: If your business started between 6 April 2023 and 5 April 2024, you had to tell HMRC by 5 October 2024.
• The Reality: If that date has passed and you haven’t filled out the form, HMRC doesn’t know you exist. This is the “failure.”

Why It Is Serious (The Fines)

HMRC can fine you just for being late to register, even if you pay your tax on time later. The fines are calculated based on the tax you owe.

They look at two things:

1. Was it an honest mistake? (Non-deliberate)
2. Did you own up to it? (Unprompted)

If you tell them voluntarily, the penalty is much lower. If they find you first, they can charge you significantly more—sometimes up to 100% of the tax due.

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Why You Need an Accountant Specifically for This

You might think, “I’ll just go online and register now.” Stop.

When you are already late, the standard registration process might not be the best route. You are now in damage control mode, and you need a professional shield. Here is why an accountant is essential right now:

• They can reduce the fine: Penalties are often a percentage of the tax you owe. An accountant will find every legal expense to lower your profit. Lower profit means lower tax, which means a lower penalty.
• They handle the “Reasonable Excuse”: When you register late, you have to explain why. Accountants know exactly what HMRC accepts as a valid excuse and how to write it to avoid extra fines.
• They manage the “Disclosure”: If it has been a long time, you might need to use a special system called the “Digital Disclosure Service.” This is complicated; if you fill it out wrong, you could accidentally make things worse. An accountant knows how to navigate this safely.
• They protect you: Once an accountant is your agent, HMRC talks to them, not you. They handle the awkward questions while you get back to work.

Summary

Missing the 5 October deadline happens, but ignoring it is dangerous. The clock is ticking on whether you tell HMRC first, or they catch you first.

Don’t try to fix this alone. A good accountant can often save you more money in fines than their fee costs.

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