How Much Is the HMRC Late Filing Penalty

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The immediate answer is £100.

If you file your tax return even one day late, HMRC automatically charges you a £100 fixed penalty.

• Crucial Rule: You must pay this £100 even if you have no tax to pay, or even if you have already paid your tax bill in full. It is a fine purely for missing the paperwork deadline.

The Full Cost: It Gets Worse if You Wait

That £100 is just the starting point. If you ignore the deadline, the fines escalate rapidly based on a strict timeline. Here is the full breakdown of what you could owe:

1. Three Months Late (The Daily Fines)

If your return is still outstanding 3 months after the deadline, HMRC adds a daily fine.

• The Cost: £10 per day.
• The Limit: This runs for up to 90 days.
• Total Risk: An extra £900 in fines.

2. Six Months Late (The Percentage Hit)

At the 6-month mark, the penalties get heavier. HMRC will charge you either:

• 5% of the tax you owe, OR
• £300 (whichever is higher).

3. Twelve Months Late

If a year passes, another penalty is added:

• Another 5% of the tax you owe, OR
• Another £300 (whichever is higher).

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The Hidden Danger: HMRC “Determinations”

If you simply refuse to file, HMRC stops waiting and starts guessing. This is called a Determination.

• What it is: HMRC estimates how much tax they think you owe based on their own data.
• The Trap: Their estimate is usually much higher than your actual bill because they won’t include your expenses or reliefs.
• The Fix: You cannot just appeal a determination. The only way to get rid of it is to file a valid tax return to replace their estimate. You have exactly 12 months from the date of their determination to do this.

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Paying Late? There Are Penalties for That Too

Filing late and paying late are treated as two separate offences. If you haven’t paid your tax bill, you face additional charges:

• 30 Days Late: A penalty of 5% of the tax still unpaid.
• 6 Months Late: Another 5% of the unpaid tax.
• 12 Months Late: A final 5% of the unpaid tax.
• Interest: HMRC charges interest daily on all unpaid tax and penalties.

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Important Update (December 2025)

Good News for Making Tax Digital (MTD) Users If you are part of the Making Tax Digital (MTD) system for Income Tax, there is a recent reprieve.

• As of 1 December 2025, HMRC announced they will not apply penalty points for late submission of quarterly MTD returns during the first year of operation.
• This also applies if you are currently in the pilot scheme.

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Why You Need an Accountant Right Now

The rules are becoming increasingly complex. With “Determinations” and new penalty points systems looming for 2026, managing this yourself is risky. Here is why an accountant is your best defence:

1. They Can Appeal the Fines If you have a “reasonable excuse” (like a tech failure where HMRC’s software rejected your return), an accountant can fight the fine.

• Tip: HMRC advises that if electronic filing fails, you should submit a paper return immediately with proof of the error. An accountant knows exactly how to package this evidence to get your fine cancelled.

2. They Fix “Determinations” If HMRC has issued a determination (an estimated bill), you are on a ticking clock. An accountant can rapidly prepare a correct return to supersede HMRC’s estimate, likely saving you thousands in incorrectly assessed tax.

3. They Prepare You for the Future (April 2026 Changes) The rules are changing. Starting April 2026 (for incomes over £50,000) and April 2027 (for incomes over £30,000), a new “points-based” penalty system kicks in.

• You will get penalty points for every missed deadline (quarterly or annual).
• Accruing too many points triggers an automatic £200 fine.
• An accountant ensures you never trigger these points, keeping your record clean.

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