Avoid the £10 Daily Penalty for Self-Assessment

£10 daily penalty for Self-Assessment starts on 1^st May

Starting from 1^st May 2024, individuals who have yet to submit their overdue Self-Assessment tax return for the 2022-23 tax year will incur additional late filing penalties of £10 per day (capped at a total of £900). These are on top of the £100 late filing penalty for missing the online submission deadline of 31^st January 2024. Approximately 1.1 million taxpayers failed to meet the January deadline, resulting in HMRC collecting a significant £110 million.  Since the £10 penalties accumulate daily, they can soon add up.  For example, an individual who does not file their return by the end of April 2024 will incur a total of £1,000 in late filing penalties!  This can often be disproportionate to the amount of tax actually owed, however unfortunately this does not mitigate the level of penalties charged by HMRC.  Further penalties will also be issued when a return is 6 months and 12 months late – these penalties are the higher of £300 or 5% of the tax due.

Moreover, separate penalties are imposed for late tax payments: 5% of the tax which is outstanding at 30 days, six months, and twelve months after the due date of 31 January 2024, accompanied by a 7.75% interest rate on the unpaid tax - the highest in over two decades.

What I should I do if I have not submitted my Self-Assessment tax return yet?

With only a few days until the end of April, it's crucial to either submit your tax return promptly or reach out to HMRC to discuss your circumstances, as there may be exceptional cases where penalties are waived.

If you are struggling to pay your tax bill, we strongly advise you get in touch with HMRC self-assessment helpline. They may be able to put an arrangement in place that can help make the payments more manageable.

You can also speak to one of our experts here - Contact our tax advisers here.