HMRC Self Assessment Penalties 2026 — Late Filing, Late Payment and How to Appeal

Missing an HMRC Self Assessment deadline is expensive, and the charges compound quickly. A return filed three months late can already attract over £1,000 in penalties before HMRC has even looked at whether you owe tax. Yet many people remain unaware of the full schedule — or of the routes available to reduce or cancel those penalties through a reasonable excuse appeal.

This guide lays out every penalty that can apply to a late 2024/25 Self Assessment return (deadline 31 January 2026 online), covers the separate late-payment interest and surcharges, explains Time to Pay arrangements, and walks you through the appeal process step by step.

The Self Assessment Deadlines for 2024/25

Before penalties apply, it helps to know the exact deadlines:

The vast majority of self-employed people, landlords, and higher earners file online, so the 31 January 2026 date is the critical one. Miss it by even one day and the clock starts ticking.

The Late Filing Penalty Schedule

Day 1: Automatic £100 Fixed Penalty

The moment your return is one day late, HMRC issues an automatic £100 fixed penalty. This applies regardless of whether you owe any tax, whether you have already paid your tax, or whether you are due a refund. The £100 is for failing to file on time — it is not a tax charge.

Three Months Late: Daily £10 Penalties

If the return remains unfiled three months after the deadline (so from 1 May 2026 for the January deadline), HMRC adds £10 per day for each day of continued failure, up to a maximum of 90 days (£900). These daily penalties are charged automatically but HMRC typically issues them in a single notice after the 90-day period has elapsed.

Running total at three months: £100 + £900 = £1,000

Six Months Late: 5% Tax-Based Surcharge

At six months late (31 July 2026 for the January deadline), a further penalty of 5% of the tax outstanding is added — or £300 if that is greater. This is the first tax-based charge and can be substantial for higher earners with large liabilities.

Example: A sole trader with £8,000 tax due who still has not filed by July 2026 faces: £100 + £900 + £400 (5% of £8,000) = £1,400 in filing penalties alone — before any payment penalty.

Twelve Months Late: Second 5% Surcharge

A further 5% of outstanding tax (minimum £300) is charged if the return is still not filed 12 months after the deadline (31 January 2027). For deliberate withholding of information, the 12-month charge can rise to 70% or 100% of the tax due.

Late Payment Penalties and Interest

Filing penalties and payment penalties are separate systems. Even if you file on time, you can still face charges for paying late.

Interest on Unpaid Tax

From 1 February 2026, interest accrues on unpaid tax at the HMRC late payment rate, currently 7.25% per annum (Bank of England base rate + 2.5%). Interest runs daily until the debt is cleared. There is no cap.

5% Payment Surcharges

Separate surcharges apply to unpaid tax:

Example: £10,000 unpaid from 1 February 2026:

• 2 March: +£500 (5%)
• 31 July: +£500 (5%) = £1,000 in surcharges, plus 7.25% daily interest accumulating throughout

Making Tax Digital (MTD) for ITSA — 2026 Implications

From April 2026, the first wave of Making Tax Digital for Income Tax Self Assessment (MTD ITSA) is live for sole traders and landlords with income over £50,000. Those in MTD ITSA file quarterly updates and a final declaration rather than a traditional annual return.

The penalty regime for MTD ITSA late submissions uses a points-based system: accumulate enough points from missed quarterly updates and an annual penalty (initially £200) triggers. This replaces the £100 day-1 penalty for MTD-mandated taxpayers. Those still on legacy Self Assessment (income under £50,000) remain on the old fixed/daily penalty regime through at least 2027.

Time to Pay Arrangements

If you cannot pay your Self Assessment bill in full by 31 January, HMRC's Time to Pay (TTP) facility lets you spread payments over instalments. Key points:

• Available for bills up to £30,000 via the self-serve online system (no need to phone HMRC)
• For larger bills, you must call HMRC's Payment Support Service: 0300 200 3835
• Interest continues to accrue at 7.25% on the outstanding balance, but the 5% surcharges are not charged if TTP is agreed before the 30-day mark
• You need to be up to date with all previous returns before HMRC will agree TTP

Setting up TTP does not eliminate interest, but it does prevent the escalating surcharges — making early action important.

What Counts as a Reasonable Excuse?

HMRC will cancel penalties if you can demonstrate a reasonable excuse: something outside your control that prevented timely filing or payment. HMRC's published list of accepted reasons includes:

• Serious illness or hospitalisation of yourself or a close family member immediately before the deadline
• Bereavement of a close family member shortly before the deadline
• HMRC online service failure on or around 31 January (HMRC keeps records of system outages)
• Flooding, fire, or other natural disaster affecting your records or access to them
• Postal delay for paper returns (you should keep proof of postage)
• Reasonable reliance on incorrect advice from HMRC

HMRC specifically states the following do not constitute a reasonable excuse:

• Not receiving a reminder notice (you are responsible for knowing your obligations)
• Pressure of work or being too busy
• Not knowing you needed to file
• Relying on an agent who missed the deadline (though the agent may have their own liability)
• Lack of funds to pay (though this may support a TTP request)

First-Time Penalty Concession

HMRC has an informal practice — not a statutory right — of cancelling the £100 first penalty for taxpayers who have a clean filing history and file shortly after missing the deadline for the first time. This is not guaranteed and not publicised, but it is worth knowing when you contact HMRC. You must still file the return to qualify.

How to Appeal a Penalty

Step 1: File the Outstanding Return First

You must submit your return before HMRC will consider an appeal. Continuing to not file makes the appeal far harder and penalties continue to accumulate.

Step 2: Use Form SA370

Appeals against Self Assessment penalties are made using form SA370 (available on GOV.UK). You can also appeal:

• Online via your HMRC Government Gateway account
• By letter (include your UTR, the penalty reference, the grounds for appeal, and any supporting evidence)

Step 3: Submit Within 30 Days

The appeal window is 30 days from the date of the penalty notice. HMRC can accept late appeals in exceptional circumstances, but the 30-day limit is taken seriously.

Step 4: Supporting Evidence

Include documentary evidence where possible: medical certificates, death certificates, screenshots of HMRC system error messages, insurance claim references. A bare assertion without evidence is rarely successful unless the penalty is the first small fixed charge.

Step 5: If HMRC Refuses

If HMRC rejects your appeal, you can request an independent review by a different HMRC officer, and then escalate to the First-tier Tax Tribunal if still unsatisfied. Tribunal referrals are free and do not require a lawyer, though professional advice is sensible for large penalties.

Penalties for Incorrect Returns

Separate from late filing, HMRC can charge inaccuracy penalties if your return contains errors:

Unprompted disclosure — telling HMRC about an error before they discover it — substantially reduces penalties. HMRC's Voluntary Disclosure service is the route to use.

Practical Steps to Avoid Penalties

1. Register early if you are new to Self Assessment — by 5 October in the year after the tax year.
2. Set a diary reminder for 20 January each year to allow ten days' buffer before the 31 January deadline.
3. File even if you cannot pay — filing penalties and payment penalties are separate, and at least filing stops the £10/day clock.
4. Use HMRC's self-serve TTP as soon as you know you cannot pay in full.
5. Keep records of HMRC system problems — screenshot any error messages with timestamps on or around 31 January.
6. Use a reputable accountant for complex returns, but confirm with them in writing that they have filed before the deadline.

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Use our Self-Employed Tax Calculator to estimate your 2024/25 Self Assessment bill before the deadline, and our Income Tax Calculator to check whether you are on the right tax code and avoiding unexpected underpayments.