Missing a tax deadline can be stressful—but it can also be costly. HMRC imposes different penalties depending on whether you’re late submitting your return or late making a payment, and these vary across Self Assessment, VAT, and Corporation Tax. At SA Lee Accountancy, we help clients stay on top of their tax obligations so they can avoid unnecessary charges and stay in control.
Here’s a quick guide to help you understand the key penalties and how to avoid them.
Self Assessment Penalties
Late Filing:
- £100 fixed penalty if your return is up to 3 months late
- Daily penalties of £10 per day after 3 months (up to 90 days)
- Additional penalties of 5% of tax due (or £300, whichever is greater) at 6 and 12 months late
Late Payment:
- 5% of tax unpaid after 30 days
- A further 5% if unpaid after 6 months
- Another 5% if still unpaid after 12 months
Even if you can’t pay straight away, it’s important to file on time to avoid escalating penalties. You can view the full list of Self Assessment penalties on GOV.UK.
VAT Penalties
HMRC introduced a new penalty system for VAT periods starting on or after 1 January 2023.
Late Filing:
You’ll receive penalty points each time you miss a deadline. Once you hit a certain threshold (based on how often you file), you’ll be charged a £200 penalty and another £200 for each additional late return.
Late Payment:
Interest is charged from the payment due date. If payment is late by:
- 16–30 days: 2% penalty
- Over 30 days: 2% + an additional 2% (total 4%), plus daily interest
For VAT-specific penalties under the current points-based system, HMRC’s VAT penalty guidance outlines the full breakdown.
Corporation Tax Penalties
Late Filing:
- 1 day late: £100
- 3 months late: another £100
- 6 months late: HMRC will estimate your tax bill and add a penalty of 10%
- 12 months late: another 10% of unpaid tax
Late Payment:
Interest is charged on late payments, even if you’ve filed on time.
Avoiding Penalties
The best way to avoid penalties is to stay ahead of deadlines. Set reminders, file on time, and if you think you’ll struggle to pay, speak to HMRC or your accountant as early as possible—payment plans are often available.
At SA Lee Accountancy, we work with individuals and businesses to ensure their returns are submitted correctly and on time. If you need support with Self Assessment, VAT, or Corporation Tax, get in touch, we’re here to help.
