Late tax return penalties
Every year almost 1 million people miss the tax filing deadline and have to pay tax return penalties.
There are three different kinds of tax return penalties:
- a fine for filing late: even if you owe no money in taxes
- a separate fine for paying your tax bill late
- and interest, also for paying your tax bill late.
Penalties for late filing
Total fines for filing a year late start at £1,600 but can technically be unlimited – it all depends on how large your original tax bill was:
| How late you are | Fine (each gets added to the others!) |
|---|---|
| between 1 day and 3 months | £100 flat fine |
| between 3 months and 6 months | £10 each day |
| between 6 months and 12 months | £300 flat or 5% of your tax bill (whichever is greater) |
| over 12 months | £300 flat or 5% of your tax bill (whichever is greater) |
Penalties for late payment
If you owe a tax bill and miss the payment deadline you will have to pay additional fines:
| How late you are | Late payment penalty |
|---|---|
| between 1 day and 30 days | 0 |
| between 30 days and 6 months | 5% of your tax bill |
| between 6 months and 12 months | another 5% |
| over 12 months | and another 5% |
Interest for paying late
This is calculated yearly, and it is (how else) added to your other penalties as well:
| Period in which you were late | Annual interest rate |
|---|---|
| Since 21 August 2018 | 3.25% |
| 21 November 2017 – 20 August 2018 | 3% |
| 23 August 2016 – 20 November 2017 | 2.75% |
| 29 September 2009 – 22 August 2016 | 3% |
| before 29 September 2009 | see the full list here |
What you can do to reduce your tax return penalties
- file it as quickly as possible to stop the fines from adding up
- if you have a reasonable excuse (a serious illness, etc.), then appeal the penalty – here’s how to do it
- if you can’t afford paying it, file for an extension with HMRC.
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