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The Problem: You’ve Received a Penalty Notice
The Problem: You’ve Received a Penalty Notice
HMRC issues late filing penalties when you miss the deadline for submitting your Self Assessment tax return (usually January 31st). The penalties start small but can escalate quickly:
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Day 1 late: £100 fixed penalty.
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3 months late: £10 per additional day (up to 90 days, max £900).
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6 months late: 5% of the tax due or £300 (whichever is higher).
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12 months late: Another 5% or £300 (higher in serious cases).
If you’re reading this, you’ve likely already received a notice. The good news? You can still resolve it.
File your missing return today – that’s non-negotiable. Then decide: pay or appeal. Just don’t ignore the notice. HMRC penalties don’t disappear, but they are resolvable with clear, prompt action.
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The Solution: 4 Actionable Steps to Take Right Now
Step 1: Check Your HMRC Account
Don’t rely on memory or paper notices. Log into your HMRC online services account to see exactly which tax year is missing and get a full breakdown of your penalty. This ensures you’re fixing the right return.
Step 2: File Your Outstanding Return Immediately
This is the most urgent step. Filing your late return stops further escalating penalties (like those daily £10 charges). Even if you can’t pay the tax right away, file the return.
Pro tip: If you don’t have all your figures, make reasonable estimates and file. You can amend the return later.
Step 3: Appeal If You Have a Valid “Reasonable Excuse”
HMRC will cancel your penalty if you have a genuine reasonable excuse – not just being busy or forgetting.
Valid examples include:
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Unexpected hospitalisation (family or your own)
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Bereavement of a close relative shortly before the deadline
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Serious computer or software failure close to the filing date
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Fire, flood, or theft preventing filing
Not accepted: “I didn’t realise the deadline” or “My accountant was on holiday.”
How to appeal:
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Online: Use the GOV.UK Penalty Appeal Tool (fastest option).
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By post: Download form SA370 (SA371 for partnerships), fill it out, and send to the address on the form.
Step 4: Pay the Penalty (If You’re Not Appealing – Or Even If You Are)
If you agree with the penalty, pay it within 30 days of the notice date via your online account or the “Pay your Self Assessment penalty” page.
If you decide to appeal: You are still generally expected to pay the penalty while you wait for a decision. Why? Because appeals can take weeks or months. If you win, HMRC will refund the full amount plus interest. If you pay late and lose, you’ll owe even more.
Quick Summary Table
| Situation | Action |
|---|---|
| You agree with the penalty | File return → Pay penalty within 30 days |
| You have a reasonable excuse | File return → Appeal online or via SA370 → Pay penalty while waiting (refundable) |
| You do nothing | Penalties increase, debt collection actions start |
