So you’re sitting with failure to pay by deadline and you’re stressing out. In this blog post we explore what failure to pay/file by deadline means and what you can expect from the process going forward.

What is Self Assessment Failure to Pay/File Penalty?

The self assessment deadline in the UK is 31 January.  You are expected to file and pay your taxes by the 31st January. Ideally you would file your self assessment before the 25th and pay by the 31st January. This will give you enough time to review the amount of tax you need to pay and make payment stress-free. If the deadline is missed, you will be charged a penalty fee.

This penalty fee is called “Failure to Pay/File”. 

 

It is important to note that there are two different penalties that apply: Failure to File Self Assessment Tax Returns and Failure to Pay your Self Assessment Tax. Let’s look at the penalties that are applicable on each respectively.

How much is Failure to File Self Assessment Tax Returns?

If you have not filed your self assessment by the 31st of January you will be penalised with a £100 fine. However, if you delay your returns for an extended time, you will be penalised more. Here is a breakdown of the penalties you can expect to pay if you do not file your tax returns timeously: 

  • 1 day — you’ll have to pay a penalty of £100
  • 3 months — you may have to pay a penalty of £10 a day, for a maximum of 90 days (£900)
  • 6 months — you may have to pay a further penalty of 5% of the tax you owe or £300, whichever is greater
  • 12 months — you may have to pay a further penalty of 5% of the tax you owe or £300, whichever is greater – in some cases, you may have to pay up to 100% of the tax you owe

These penalties are in addition to any penalties for paying your tax late.

HMRC Penalties amounts and times

How much is the Failure to Pay Tax penalty?

Once you have submitted your tax returns, you will know how much tax you owe the HMRC for that tax year. If you fail to pay this on the due date (31 January), you will receive additional penalties. Here are the penalties you could be looking at if you delay in paying the taxes:


  • 30 days — you’ll have to pay 5% of the tax you owe at that date
  • 6 months — you’ll have to pay a further penalty of 5% of the tax you owe at that date
  • 12 months — you’ll have to pay a further penalty of 5% of the tax you owe at that date

These penalties are in addition to any penalties for sending your tax return late.

I can’t pay my HMRC Tax

Okay. So you’ve submitted your tax returns and you know how much you owe. However, you do not have the financial capacity to pay everything by the 31st of January. That’s okay, you can work out a payment plan with the HMRC to pay your taxes in monthly or weekly instalments.

You will need the following information to apply for a payment plan with the HMRC: 

  • the relevant reference number for the tax you cannot pay, such as your unique tax reference number
  • your bank account details
  • details of any previous payments you’ve missed

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Other HMRC Penalties

These are not the only penalties the HMRC can charge. There are a few other penalties that can be given if your tax returns are not done correctly. This includes penalties for: 

 

  • Failure to Notify 
  • Penalties for Inaccurate
    • Carelessness (Between 0% – 30%) 
    • Deliberate (Between 20% – 70%) 
    • Deliberate and Concealed  (Between 30% – 70%)
  • VAT and Excise wrongdoing Penalty

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