If you have not yet submitted your self-assessment tax return submitted to HMRC, there’s not much time left. All self-assessment returns are due to be submitted to HMRC by 31st January 2026 at the latest.
If the return is late, then it can lead to an immediate £100 fine! To avoid this, make sure you submit your retutn on time. HMRC will also charge interest, which will start to build up if any tax due is paid late.
General principles of Self Assessment
Under Self Assessment, individuals are responsible for notifying chargeability, filing returns, calculating and paying liabilities, and maintaining records to support the return
A return must be filed when HMRC issues a notice to file; filing deadlines depend on the issue date and whether the return is paper or electronic.
HMRC may impose civil penalties for late filing and late payment, subject to statutory reasonable excuse and special circumstances provisions and rights of appeal.
Filing obligations: who must file and when
If HMRC issues a notice to file under, the due date depends on the issue date and the method of filing (paper vs electronic).
Where a paper return or notice to file is issued on or before 31 October following the tax year, the filing date is 31 October for paper returns (or three months after issue if after 31 July), and 31 January following the tax year for electronic returns.
Where the return or notice is issued after 31 October following the tax year, the filing date is three months after the date of issue.
If the taxpayer wants HMRC to collect an underpayment of less than £3,000 through the PAYE code, the electronic return must be filed by 30 December after the end of the tax year, or paper by 31 October (or, if later, two months after issue).
Certain taxpayers (including judges and MPs) are excluded from filing online; their filing due date for the replacement paper return is 31 January following the end of the tax year.
Note that the above deadlines are statutory; they run from notice to file dates and the tax year end, and they determine when penalties start to run if missed.
Payments: timing, interest and late payment penalties
Penalties apply for failure to pay tax on time in addition to late payment interest, and a reasonable excuse defence may be available.
For income tax Self Assessment, the late payment penalty regime commenced on 6 April 2011, with new rules to apply from 2026 for specific income taxpayers as part of phased Making Tax Digital changes.
HMRC may suspend late payment penalties after a Time to Pay or managed payment plan is agreed, provided the terms are met; if the agreement is breached, penalties can be re imposed.
HMRC advises taxpayers who expect to be late paying to contact HMRC immediately to discuss liabilities and agree a Time to Pay arrangement where appropriate.
Interest is charged in addition to any penalty and accrues whenever tax is paid late, regardless of whether a penalty is ultimately charged.
Late filing penalties
For income tax and capital gains tax returns, an initial £100 fixed penalty applies immediately after the filing deadline even if no tax is due or it is paid on time.
If the failure continues beyond three months, a daily penalty of £10 can be charged up to a maximum of £900.
If the failure continues beyond six months, a further penalty is charged being the greater of £300 or 5% of the tax which would have been shown on the return.
If the failure continues beyond 12 months, an additional tax geared penalty applies, escalating where withholding of information is deliberate or deliberate and concealed.
Whatever the penalty, the element calculated by reference to the tax liability cannot exceed 100% of the tax due, and where other penalties are calculated by reference to the same tax, the late filing penalty is reduced by the amount of the other penalty.
The “new rules” framework also describes increments between three, six and 12 months late, and minimum £300 elements for more than 12 months late, aligned to behaviour.
Late payment penalties, reasonable excuse and special circumstances
Late payment penalties are separate from interest and can be suspended prospectively by agreeing Time to Pay; reasonable excuse can prevent a penalty being charged.
A taxpayer with a reasonable excuse may have a penalty cancelled; the Upper Tribunal in Perrin v HMRC [2018] set out a structured approach to assessing reasonable excuse, including assessing proven facts, objective reasonableness for the particular taxpayer, and whether the failure was remedied without unreasonable delay.
Insufficiency of funds is not a reasonable excuse unless attributable to events outside the taxpayer’s control, and reliance on another person is not a reasonable excuse unless reasonable care was taken to avoid the failure.
Although “ignorance of the law” is often said to be no excuse, the Upper Tribunal recognised it may in some circumstances be objectively reasonable for a particular taxpayer for a limited time.
Tribunals have also stressed that HMRC must genuinely consider “special circumstances” for reducing penalties and should not rely on boiler plate statements; a failure to consider special reduction is a flawed decision.
Determinations if no return is filed.
If an individual fails to file a return, HMRC may issue a determination of the tax believed to be payable within three years from the filing date for the return.
A determination has effect as if it were the taxpayer’s own self assessment, so interest and penalties can be charged and payment enforced.
A determination cannot be appealed; it can only be superseded by submitting a valid return and self assessment within 12 months from the date of issue.
Appeals and reviews: deadlines and options
Taxpayers have 30 days from the date of an assessment or notification of an amendment to notify HMRC that they disagree.
If agreement cannot be reached, the taxpayer may either appeal to the tribunal or request an internal HMRC review; HMRC may also offer a review.
A taxpayer may appeal to the tribunal at the same time as notifying HMRC of disagreement if they do not wish HMRC to carry out a review.
Amending or making a late self assessment
The final statutory time limit for making a self assessment after issue of a notice to make a return is four years from the end of the tax year (or, if later, three months from the date of the notice). This long stop ensures a self assessment can be made even if earlier deadlines have been missed, but it does not displace penalties already incurred for late filing.
Record keeping: what to keep and how long
Individuals must retain records until 12 months after the 31 January following the end of the tax year to which they relate, with a five year period for the self employed and those with rental income.
HMRC can reduce the retention time, but if a return is submitted late or an enquiry is opened, records must be retained until the last day HMRC can enquire or until the enquiry is completed.
Separately, HMRC has power to agree shorter periods and specify, by secondary or tertiary legislation, what supporting documents and information must be kept, though records must always be retained while an enquiry window is open.
Conclusion and tailored application
For 2024–25, ensure you identify your exact statutory filing date from your notice to file and how you intend to submit the return; if you want HMRC to collect an underpayment under £3,000 through PAYE, target 30 December 2025 for electronic filing.
If you file late, the £100 fixed penalty arises automatically and then escalates, so prioritise timely submission even if you do not yet have funds to pay, because late payment is penalised separately and interest will accrue until cleared.
If cash flow is tight, contact HMRC early to agree Time to Pay to suspend further late payment penalties while you comply, and retain evidence in case you need to advance a reasonable excuse claim.
Keep records for the required period, and if you receive an assessment or penalty you dispute, use the 30 day appeal window and consider an HMRC review or a direct tribunal appeal as appropriate.
If you need any tax advice in Milton Keynes give a call to the team at Holmes Accountancy on 01908 315716 or contact us here.
The tax tip is provided for general guidance only; further advice should be sought, for specific issues.
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