All about HMRC penalties

Everything you need to know about HMRC fines and penalties

Ouch! We hate the sound of HMRC penalties as much as you do but our team of tax experts at DSR Tax Claims want to give you all of the information you need to know about taxes – and that means giving you the bad news as well as the good. However, knowledge is power, as they say so hopefully our helpful guide will stop you from landing a nasty HMRC penalty. Call our friendly and professional team on 0330 122 9972 if you are still unsure about anything.

Self-assessment penalties

HMRC penalties are pretty bad news – you can land yourself with a £100 fine just for being a day late filing your self-assessment tax return – and we want to help you avoid them. Penalties can keep racking up on a daily basis and you can end up being fined a percentage of the tax that you owe, on top of the tax that you owe, so it is really important for you to keep on top of your tax affairs to stop the situation from going from bad to worse.

What are the penalties?

Late filing penalties are as follows:

Late filing Late Payment Penalty
If you miss the filing deadline of 31st of January Automatic £100 penalty
30 days late 5% of tax due
3 months late Daily penalty of £10 per day for up to 90 days (maximum penalty of £900)
6 months late 5% of tax due or £300, if greater
6 months late 5% of outstanding tax at that date
12 months late 5% or £300 if greater, unless HMRC deem that the taxpayer is deliberately withholding information that would enable HMRC to calculate any tax due.
12 months late Penalties depend on the behaviour of the taxpayer.

 

If it is deemed that deliberate and concealed withholding is taking place then the penalty would be 100% of tax due or £300 if greater.

 

If it deliberate but not concealed, 70% of tax due or £300 if greater.

 

Reductions could be applied if taxpayer complies with HMRC at this point.

What if your self-assessment form is wrong?

If you have used incorrect information in your self-assessment form, you might be able to resolve the problem before you are issued with a penalty. You have up to 12 months after filing your self-assessment form to make changes, so if you do your taxes online, you can just log into your account and add the correct information instead. But time is of the essence! HMRC recognise that taxation can be complex and know that mistakes can be made but they will take a harsh view on anyone deliberately understating the amount of tax that they owe or trying to claim too much tax relief on their expenses. If they believe it is a genuine mistake, you probably won’t get a penalty as long as you fix the issue as quickly as possible and it will always work out better for you if you fully cooperate with any investigation.

Life sometimes gets in the way and with the best will in the world, sometimes deadlines get missed or information is incorrect. HMRC will sometimes accept the following reasons for late filing or incorrect information:

  • You suffered a difficult personal situation such as a death in the family or a serious illness.
  • You were subject to errors or delays from the banking system or postal system.
  • You were given incorrect HMRC information relating to your return.
  • You attempted honestly to file or pay your taxes but were affected by a technical error or situation.

However, HMRC don’t like to be deliberately misled and any attempt to lie to get yourself off the hook will make the situation even worse for you.

And if HMRC get it wrong?

Get on to it without delay! Whether it is a mistake by HMRC or even a case of identity fraud, the sooner you get in touch with HMRC to rectify it, the better it will be for you.

Of course, if you are a client of DSR Tax Claims then you won’t need to worry about HMRC action. Our refunds are 100% HMRC-safe and we will deal with HMRC on your behalf so you don’t have to. So, call our friendly team on 0330 122 9972 and talk to the tax experts you can trust.

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