Late partnership return penalties for each partner

Q: How quickly can the total build up?

Illustration only. A five partner firm files its online return 13 months late. One partner retired during the year covered by the return. All five are relevant partners, so each is charged £100, £900 in daily penalties (if HMRC gave notice from the 3 month point), £300 at 6 months and £300 at 12 months. That is £1,600 each and £8,000 across the firm, before any penalties on the partners' own returns. CH62940 uses a similar five partner example to show that each partner is liable to the initial £100. If the nominated partner was in hospital after an emergency admission from mid January until mid March, and the return went in within a few days of discharge, an appeal by the nominated partner could remove all five sets of penalties for that delay. In this illustration, though, the return was filed 13 months late, long after the nominated partner recovered. Under paragraph 23(2)(c) the excuse is only treated as continuing if the failure is remedied without unreasonable delay, so here it falls away and the penalties stand.

When a partnership return is filed late, HMRC does not charge the partnership. Under paragraph 25 of Schedule 55 to the Finance Act 2009, every person who was a partner at any time in the return period pays their own set of penalties: £100, then up to £900 in daily penalties, then £300 at 6 months and £300 at 12 months. Only the nominated partner, or their successor, can appeal, and that one appeal covers every partner. Whether there is a reasonable excuse depends on the nominated partner’s circumstances.

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Who has to pay when the partnership return is late?

Paragraph 25(1) and (2) apply where the representative partner, or a successor, fails to file a partnership return on time. In that case a penalty is payable by every relevant partner. Paragraph 25(6) defines a relevant partner as anyone who was a partner at any time during the period the return covers. The representative partner is the person HMRC’s notice under section 12AA of the Taxes Management Act 1970 requires to deliver the return. HMRC’s Self Assessment Legal Framework manual at SALF506A calls this person the nominated partner.

The definition looks back, not forward. A partner who retired halfway through the accounting period is still a relevant partner and is charged, even if they had no part in the late filing. Someone who joined after the period ended is not. Partnership agreements often deal with who bears these costs, but HMRC assesses each relevant partner individually. See leaving a partnership for other loose ends a departing partner should tidy up.

The return deadlines are the usual Self Assessment ones. The 2026 SA800 return form says the 2025 to 2026 partnership return must reach HMRC by 31 October 2026 on paper or 31 January 2027 online. Partnership tax returns (SA800) covers what goes on the return.

How much does each partner pay?

HMRC’s Compliance Handbook at CH62940 sets out the charges for an income tax or capital gains tax partnership return:

When	Penalty	Amount for each partner
Day after the filing date	Initial fixed penalty	£100
3 months after the penalty date	Daily penalties	£10 a day for up to 90 days
6 months after the penalty date	6 month penalty	£300
12 months after the penalty date	12 month penalty	£300

The 6 and 12 month penalties for an individual’s return are normally the greater of 5% of the tax and £300. A partnership has no tax liability of its own for income tax and capital gains tax, so CH62920 explains that each partner is charged the £300 minimum instead. For the same reason, SALF506A confirms that the higher 12 month penalty for deliberately withholding information does not apply to a partnership return. That penalty is explained in the 12 month penalty for withheld information.

Daily penalties are not automatic in law. Paragraph 4 requires HMRC to decide they should apply and give notice of the date they start, and SALF506A says that notice goes to each relevant partner.

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Who can appeal on behalf of the partnership?

Under paragraph 25(4), an appeal can be brought only by the representative partner or their successor. Paragraph 25(5) treats that appeal as an appeal against every penalty charged for the same failure. CH64540 makes the practical point that individual partners have no separate right of appeal. HMRC’s Partnership Manual at PM148000 describes it as a composite appeal made on behalf of all relevant partners, with the nominated partner treated as if they were liable to each penalty. The nominated partner can challenge both whether a penalty is due and how much it is.

gov.uk’s appeal tool covers both individual and partnership Self Assessment penalties. It lets you appeal online or download form SA370 or SA371 to appeal by post. You usually have 30 days from the date the penalty was issued. If you miss that, see late appeals. Paragraph 21(2)(a) means no partner has to pay before the appeal is decided. However, gov.uk warns that if the appeal fails, interest runs on an unpaid penalty from its due date, so partners may prefer to pay and reclaim.

Whose excuse counts as a reasonable excuse?

Paragraph 23 gives the usual defence: no penalty arises if HMRC, or on appeal the tribunal, accepts there was a reasonable excuse for the failure. Paragraph 23(2) sets the standard limits. Lack of funds only counts if caused by events outside your control. Reliance on another person only counts if reasonable care was taken. And once the excuse ends, the return must follow without unreasonable delay.

SALF506A applies those limits to the nominated partner. The Self Assessment Manual at SAM10090 says the nominated partner is responsible for sending the return, so they may have a reasonable excuse for it being late. It adds that the circumstances of the other partners are not normally relevant, although each case turns on its facts. In practice:

a serious illness of the nominated partner shortly before the deadline can excuse every partner’s penalties, whereas illness of a partner with no role in the return usually will not;
delay by the partnership’s accountant is not enough unless the nominated partner took reasonable care, such as chasing and checking the return was filed. See relying on an adviser;
if the nominated partner dies before filing, SAM10090 says their personal representatives do not take over the duty to file, because they do not become partners.

More on the general test is in reasonable excuse for a late tax return.

What if no partnership return was needed?

CH62920 and CH62940 both say any late filing penalties already charged will be cancelled where HMRC agrees to withdraw the notice to file. That is the right route for a partnership that had ceased, or never traded, before the notice was issued, rather than arguing reasonable excuse. Where HMRC refuses, the nominated partner can still appeal.

If there is no reasonable excuse, paragraph 16 lets HMRC reduce penalties because of special circumstances, which do not include ability to pay. See special reduction of penalties.

How quickly can the total build up?

Illustration only. A five partner firm files its online return 13 months late. One partner retired during the year covered by the return. All five are relevant partners, so each is charged £100, £900 in daily penalties (if HMRC gave notice from the 3 month point), £300 at 6 months and £300 at 12 months. That is £1,600 each and £8,000 across the firm, before any penalties on the partners’ own returns. CH62940 uses a similar five partner example to show that each partner is liable to the initial £100.

If the nominated partner was in hospital after an emergency admission from mid January until mid March, and the return went in within a few days of discharge, an appeal by the nominated partner could remove all five sets of penalties for that delay. In this illustration, though, the return was filed 13 months late, long after the nominated partner recovered. Under paragraph 23(2)(c) the excuse is only treated as continuing if the failure is remedied without unreasonable delay, so here it falls away and the penalties stand.

Will the rules change under Making Tax Digital?

Not yet for partnerships. gov.uk’s guidance on Making Tax Digital for Income Tax penalties says the new points based late submission penalties do not apply to a partnership return submitted by a nominated partner, and current penalties still apply to it. The 2026 regulations that brought Schedule 24 to the Finance Act 2021 into force for income tax from 1 April 2026 expressly exclude partnerships.

When partnerships do move over, Schedule 24 works differently. Paragraph 25 of that Schedule treats the partners together as a single deemed person that keeps going despite changes in membership. Any £200 penalty is then the joint and several liability of everyone who is a partner on the day it is assessed. That includes people who joined after the points were earned. Compare MTD late submission penalty points.

What mistakes do partnerships make?

Individual partners appealing their own penalty notices. Only the nominated partner or successor can appeal.
Assuming a departed partner escapes. If they were a partner during the return period, they are charged.
Relying on another partner’s personal difficulties when the nominated partner was well and able to file.
Ignoring the daily penalty warning letters, which turns a £100 problem into a £1,000 problem for each partner within months.

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Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 24 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.