HMRC Penalties — Every Penalty Structure in One Place
HMRC enforces separate penalty regimes for Self Assessment late filing (£100 escalating to £1,600+), Self Assessment late payment (5% surcharges at 30 days, 6 months and 12 months plus interest), failure to notify (0–100% of tax depending on behaviour), VAT late submission (points-based, £200 per return at threshold), CIS returns (£100+ per return), PAYE RTI (£100–£400/month by employee count), and Companies House accounts (£150–£1,500). Most penalties can be appealed within 30 days on reasonable excuse grounds.
Key facts
- The Self Assessment late-filing penalty starts at £100 — and applies even if you owe £0 tax.
- Interest on unpaid tax runs at Bank of England base rate + 2.5% (~7.75% currently).
- Most penalties carry a 30-day appeal window with a reasonable excuse defence.
1. Self Assessment — Late Filing
| Days late | Penalty |
|---|---|
| 1 day | £100 (automatic) |
| 3 months (day 91) | £10/day for up to 90 days — max £900 |
| 6 months | 5% of tax due or £300 (whichever is greater) |
| 12 months | Further 5% of tax due or £300 |
Worst case: a 13-month-late return with £10k tax due owes £100 + £900 + £500 + £500 = £2,000 in penalties on top of the tax and interest.
2. Self Assessment — Late Payment
| Time overdue | Penalty |
|---|---|
| 30 days | 5% of unpaid tax |
| 6 months | Further 5% |
| 12 months | Further 5% |
Plus interest at Bank of England base rate + 2.5% (currently ~7.75%) accruing from day 1.
3. Failure to Notify (FA 2008 Sch 41)
| Behaviour | Penalty range (% of unpaid tax) |
|---|---|
| Non-deliberate, unprompted | 0–30% |
| Non-deliberate, prompted | 10–30% |
| Deliberate, not concealed | 20–70% |
| Deliberate and concealed | 30–100% |
4. VAT — Late Submission (Points-Based)
| Filing frequency | Points threshold | Penalty at threshold |
|---|---|---|
| Quarterly | 4 points | £200 per late return |
| Monthly | 5 points | £200 per late return |
| Annual | 2 points | £200 per late return |
Points expire after 24 months of compliance. Late VAT payment: no penalty if paid within 15 days; 2% at 16–30 days; further 2% at 31+ days; plus a daily penalty at 4% per annum.
5. CIS — Monthly Return Penalties
| Delay | Penalty |
|---|---|
| 1 day late | £100 (per 50 subcontractors) |
| 2 months | Additional £200 (per 50) |
| 6 months | Additional £300 or 5% of deductions, whichever greater |
| 12 months | Additional £300 or 5% of deductions |
6. PAYE RTI — Monthly Filing Penalties
| Number of employees | Penalty per month |
|---|---|
| 1–9 | £100 |
| 10–49 | £200 |
| 50–249 | £300 |
| 250+ | £400 |
7. Companies House — Late Filing of Accounts
| Delay | Private company penalty |
|---|---|
| Up to 1 month | £150 |
| 1–3 months | £375 |
| 3–6 months | £750 |
| Over 6 months | £1,500 |
Penalties double for persistent late filing (late two years in a row).
8. Appeals and Escalation
- Most penalties: 30-day appeal window from the date on the notice.
- Reasonable excuse defence available for Self Assessment and VAT (illness, bereavement, fire/flood, IT failure, reliance on HMRC information).
- Escalation route: internal HMRC review → First-tier Tribunal (Tax Chamber) → Upper Tribunal.
- Service complaints (not the penalty itself): HMRC complaints team → Adjudicator's Office → Parliamentary and Health Service Ombudsman.
Related
- Self Assessment Penalty Calculator — model your exact penalty + interest exposure.
- The HMRC Letter — what to do — 10 common HMRC letters decoded.
- Self Assessment Deadlines 2025/26
FAQs
How much is the HMRC Self Assessment late filing penalty?
An automatic £100 the day after the deadline (regardless of whether tax is owed). After 3 months HMRC adds £10/day for up to 90 days (max £900). At 6 months a further 5% of the tax due or £300, whichever is greater. At 12 months another 5% or £300. A return more than a year late can cost £1,600+ before any tax is even calculated.
How does the new VAT points-based penalty system work?
From 1 January 2023, late VAT submissions earn 1 point per missed return. Hit the threshold (4 for quarterly, 5 for monthly, 2 for annual filers) and a flat £200 penalty applies — and every subsequent late return until points expire. Points reset to zero after 24 months of full compliance plus filing every outstanding return.
Can I appeal an HMRC penalty?
Yes — most penalties have a 30-day appeal window. You can claim reasonable excuse (illness, bereavement, IT failure, reliance on HMRC), request an internal review, then escalate to the First-tier Tribunal (Tax Chamber). Beyond that lies the Upper Tribunal. Service complaints (rather than the penalty itself) go HMRC → Adjudicator's Office → Parliamentary Ombudsman.
What's the difference between a penalty and interest?
A penalty is a punishment for non-compliance (late filing, late payment, failure to notify). Interest is the time-value cost of HMRC being out-of-pocket — currently Bank of England base rate plus 2.5% (~7.75%), charged from the original due date. Interest is not appealable; only the underlying tax or penalty is.