If you are not yet in Making Tax Digital, a late Self Assessment return triggers a £100 penalty the day after the deadline, then up to £900 of £10 daily penalties once it is 3 months late, then the greater of 5% of the tax due or £300 at 6 months and again at 12 months. These penalties come from Schedule 55 to the Finance Act 2009. The 12 month penalty can rise to 70% or 100% of the tax if you deliberately withheld information.

Who do these penalties apply to?

Schedule 55 FA 2009 covers income tax returns under section 8 of the Taxes Management Act 1970, which includes the individual Self Assessment return. From the tax year a person joins Making Tax Digital for Income Tax, gov.uk says new points based late submission penalties replace these for their personal return. The current penalties still apply to earlier years: gov.uk gives the example that someone using MTD from 6 April 2026 is still under the current penalties for the 2025 to 2026 return due on 31 January 2027.

gov.uk also says the new penalties do not apply to returns for a non resident company, a trust or estate, or a partnership. Schedule 55 continues to apply to those.

When does the £100 penalty arise?

HMRC’s Compliance Handbook (CH62080) explains that the penalty date is the day after the filing date, and the initial fixed penalty of £100 is due on that date (Schedule 55 paragraph 3). For a 2025 to 2026 online return the filing date is 31 January 2027, so the penalty date is 1 February 2027. For a paper return the filing date is 31 October 2026.

The £100 is a fixed amount. It does not depend on how much tax the return shows, and gov.uk notes that all partners will be charged a penalty if a partnership return is late.

If HMRC sent the notice to file late, the filing date moves under section 8 TMA 1970 (for example, to 3 months from the notice where it was issued after 31 October), and the penalty date moves with it. See Self Assessment deadlines for the dates.

How do daily penalties work?

Under paragraph 4, daily penalties apply only if all three conditions are met: the return is still outstanding after the period of 3 months beginning with the penalty date, HMRC decides a daily penalty should be payable, and HMRC gives notice of the date from which it runs. The penalty is £10 for each day the failure continues in the 90 days from that date, so the maximum is £900.

The date in HMRC’s notice can be earlier than the date the notice is given, but not earlier than the end of the 3 month period (paragraph 4(3)). In practice, a reminder letter that arrives after the 3 months can still charge daily penalties from the 3 month point.

What are the 6 month and 12 month penalties?

Paragraph 5 adds a penalty once the return is outstanding for 6 months from the penalty date: the greater of 5% of the tax liability that would have been shown in the return and £300. Paragraph 6 adds another at 12 months. CH62240 explains that the liability is the net figure after tax deducted at source, and that it is not reduced by any payments made towards it.

The 12 month penalty depends on behaviour:

Behaviour 12 month penalty (greater of) Reduced for disclosure?
Not deliberate 5% of the liability or £300 No
Deliberate but not concealed 70% of the liability or £300 Yes
Deliberate and concealed 100% of the liability or £300 Yes

Higher percentages apply where the information withheld involves an offshore matter. CH63600 says that where more than one tax geared late filing penalty applies, such as the 6 and 12 month penalties, the total must not exceed 100% of the liability, though this limit is raised for some offshore information.

SALF208A also makes clear that each penalty stands alone: you become liable to the 6 month penalty even if no daily penalties were charged.

Worked example: a 2025 to 2026 return filed over a year late

Illustration only. Tom’s 2025 to 2026 online return was due on 31 January 2027. He files it on 15 March 2028 and it shows tax of £8,000. He did not deliberately withhold information, and HMRC issued a daily penalty notice. Following HMRC’s own examples in SALF208A:

  • £100 initial penalty on 1 February 2027
  • £900 daily penalties (90 days at £10 from 1 May 2027 to 29 July 2027)
  • £400 at 6 months, on 1 August 2027 (5% of £8,000 is more than £300)
  • £400 at 12 months, on 1 February 2028

That is £1,800 in late filing penalties. Late payment penalties and interest are separate and would be added if the £8,000 was also paid late.

Can a late filing penalty be cancelled or reduced?

There are four main routes.

  • Reasonable excuse. Under paragraph 23, no penalty arises if you satisfy HMRC or the tax tribunal that you had a reasonable excuse. Insufficient funds is not an excuse unless caused by events outside your control. Relying on someone else, such as an agent, is not an excuse unless you took reasonable care to avoid the failure. If the excuse ends, you must put things right without unreasonable delay. See reasonable excuse.
  • Special reduction. Paragraph 16 lets HMRC reduce a penalty because of special circumstances, which do not include ability to pay.
  • Withdrawal of the notice to file. Section 8B TMA 1970 allows HMRC to withdraw a notice to file, usually within 2 years after the end of the tax year, if no return has been filed. CH62080 says late filing penalties already charged are cancelled where HMRC agrees to withdraw the notice.
  • Appeal. Paragraph 20 gives a right of appeal against the penalty or its amount. gov.uk says you usually have 30 days from the date the penalty was issued, and SALF208A notes you do not have to pay the penalty while the appeal is decided. See late appeals to HMRC if you have missed that window.

If you do not appeal, gov.uk says the penalty must be paid within 30 days of the date on the penalty notice.

How do these differ from late payment penalties and MTD points?

Late filing and late payment are separate failures. gov.uk lists late payment penalties of 5% of the tax unpaid at 30 days, 6 months and 12 months, plus late payment interest. A return filed on time with the tax paid late attracts only the payment penalties.

Under MTD for Income Tax, gov.uk says each missed quarterly update (for tax years after 2026 to 2027) or tax return deadline earns one point, and at the threshold of 4 points you get a £200 penalty, then £200 for each further missed deadline. Late quarterly updates in 2026 to 2027 do not attract points, but a late return for that year does.

What are the common mistakes?

  • Thinking no tax means no penalty. The £100 and any daily penalties are fixed amounts, and the 6 and 12 month penalties have a £300 floor.
  • Ignoring a return you do not need. Ask HMRC to withdraw the notice; penalties continue to build until you do.
  • Blaming the agent without more. Paragraph 23 requires you to show you took reasonable care.
  • Missing the 30 day appeal window. A late appeal needs a reason.

For other HMRC penalties, see the HMRC penalties table.

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Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 19 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.