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Late filing penalty

A late filing penalty is a fee charged by HMRC if you file your tax return late. As you might expect. The penalty varies depending on whether you’re a sole trader or whether you run a limited company

We’ll focus here on the penalties for sole traders, but take a look at the below table if you’re a limited company.

How late are you? Penalty
Up to 1 month £150
1-3 months £375
3-6 months £750
6+ months £1,500

The late filing penalty as a sole trader

Here are a few important things to bear in mind when it comes to paying your Self Assessment tax return:

  • There is a separate fine for registering as self-employed late and paying your tax bill late, and they get added up
  • You pay interest when you pay late
  • You’re fined for filing late even if you owe no money in taxes, but had to file for another reason, for example, if you were already registered for Self Assessment

The late penalty starts at £100 if you’re a day late and it can increase all the way to £1,600 for a whole year. 

Take a look at our late tax penalty calculator to get an estimate of how much you might have to pay.

Be aware that you are allowed to appeal a fine with HMRC, but you need a good reason to do so. That can be anything from: 

  • A house fire
  • Flooding
  • Bereavement
  • Serious illness

Deadlines to be aware of

As a sole trader, here are the deadlines that you should put into your diary to stay on top of things when it comes to paying your taxes:

  • The tax year – 6th April – 5th April
  • Tax return deadline – 31st January
  • Payment on Account deadline – 31st July
  • Register for Self Assessment online – 5th October

January 2021 HMRC update

If you’re filing your 2019/20 tax return, HMRC announced a payment update on 25th January 2021. Take a look at what’s changed here to see how the temporary deadline conditions might affect you.

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