Tax season is here, and with it comes the pressure of meeting the Self-Assessment (SA) deadline.
The stakes are high: missing the January 31st deadline can lead to significant penalties, interest charges, and long-term financial consequences.
Are you ready to face the financial fallout of procrastination, or will you take action to save yourself from unnecessary costs?

(Read Time: Approx. 4 minutes)
Topics Discussed:
- The penalties you could face for missing the Self-Assessment deadline.
- How to reduce or avoid penalties through proactive measures.
The Price of Procrastination – Penalties Explained
Failing to submit your SA tax return or pay your taxes on time can lead to a cascade of penalties.
Here’s what you could face:
- Late Filing Penalties:
- Miss the January 31st deadline? Expect an automatic £100 fine.
- Three months late? Add £10 per day (up to £900).
- Six months late? It’s either 5% of tax due or £300, whichever is greater.
- A year late? Deliberate withholding can lead to penalties as high as 100% of the tax due.
- Late Payment Penalties:
- 5% of unpaid tax if overdue by 30 days, 6 months, and 12 months.
- Compounding Interest:
- Interest accrues daily on unpaid taxes and penalties, exacerbating the financial burden – HMRC has a 7% interest on top of your penalties.
Late Filing Example
Imagine Michael, who went to Finland on a sabbatical in January 2023 and accidentally forgot to file his 2021–22 Self-Assessment tax return.
This resulted in an automatic £100 penalty.
Upon returning, Michael filed his return on 1 February 2024. HMRC imposed the following penalties:
- Missed Filing Deadline (31 Jan 2023): £100
- Unfiled After 3 Months (30 Apr 2023): £10 per day for 90 days (£900)
- Unfiled After 6 Months (31 Jul 2023): £300 (reduced to £100 due to interaction rules)
- Unfiled After 12 Months (31 Jan 2024): £300 (reduced to nil)
The total penalty was capped at £1,100 due to statutory interaction rules that prevent the penalties from exceeding 100% of the tax due.
If you account for the interest, you’d be looking at a 7% on top of this per day – this would potentially cause Michael to reach the cap sooner.
Late Payment Example
Now consider Sarah, who owed a £10,000 balancing payment for the 2021–22 tax year, due on 31 January 2023.
She ignored reminders and finally paid her tax in February 2024. Here’s how the penalties accrued:
- Unpaid by 2 March 2023: £500 (5% of £10,000) plus
- Unpaid by 2 August 2023: £500 (5% of £10,000) plus
- Unpaid by 2 February 2024: £500 (5% of £10,000)
Sarah incurred £1,500 in late payment penalties, plus daily 7% interest – this results in the charges of:
- Unpaid by 2 March 2023: £500.01 (7% daily interest)
- Unpaid by 2 August 2023: £1014.86 (7% daily interest)
- Unpaid by 2 February 2024: £1550.25 (7% daily interest)
Are You Exempt?
HMRC recognises reasonable excuses in rare circumstances, such as severe illness or system failures.
Victims of the Post Office Horizon scandal or those affected by specific Covid-19 delays may also receive leniency.
However, these are exceptions, not the rule.
Most taxpayers must adhere to strict deadlines or face the consequences.
Act Now to Prevent Penalties
If you’re struggling to meet the deadline, consider these strategies:
- File Your Return Immediately: Even incomplete filings can reduce penalties.
- Set Up a Payment Plan: Avoid late payment penalties by contacting HMRC and arranging a Time to Pay agreement.
- Seek Expert Advice: Professional guidance can help you navigate complex rules, especially if penalties seem excessive or unjust – send Tax Expert an email today if you need help.
What If I Owe HMRC Money?
If you owe HMRC money, it’s essential to understand the process they follow to recover debts.
Their Debt Collection process is systematic and escalates if action isn’t taken promptly.
Here are the five stages you need to know:
- Reminder Letter: HMRC will send a letter notifying you of your overdue payment.
- Debt Management Phone Call: A follow-up call from HMRC’s debt management team aims to resolve the issue.
- Unannounced Field Agent Visit: HMRC may send a field agent to your premises, potentially seizing assets under the “Taking Control of Goods” procedure.
- Final Warning Letter: This marks your last chance to pay before HMRC initiates winding-up or bankruptcy proceedings.
- Enforcement & Insolvency Service Action: HMRC’s enforcement office can and does issue winding-up petitions or file for bankruptcy.
We work closely with HMRC at every stage of this process, leveraging our direct contacts to secure long-term payment plans that may not be available to you otherwise.
The earlier we step in, the better the chances of achieving a favourable resolution.
Summary
The Self-Assessment deadline is fast approaching, and failure to act could leave you facing penalties, interest charges, and the stress of dealing with HMRC enforcement.
Don’t let inaction ruin your financial stability. Start your filing process today to avoid the costly fallout of missed deadlines.
For actionable tips, watch our TikTok video on avoiding SA penalties.
Fill out our form here for any questions, give us a call at 01772 788200, or message us on our WhatsApp for out of office hours.
Kind regards,
Ilyas Patel