Top

Penalties for late returns

Income tax self-assessment Standard penalties for filing late
Late return £100 (or £100 per partner for a partnership return)
Plus: 3 months late £10 per day up to a maximum of £900
Plus: 6 months late Further penalties calculated on the greater of 5% of tax due or £300

For failure to notify liability or for careless inaccuracies in a return where the disclosure in unprompted:

Failure not deliberate: up to 30% of tax

Failure deliberate but not concealed: up to 70% of tax

Failure deliberate and concealed: up to 100% of tax

Where the failure or inaccuracy relates to an offshore asset or income these penalties can be scaled up by either 50% or 100%.
Standard penalties for paying balancing amount late:
30 days late 5% of the unpaid tax due at that date
6 months late A further 5% penalty of the tax that remains unpaid at the date
12 months late A further 5% of the tax that remains unpaid at the date

Other penalties:

Failure to keep and retain tax records: up to £3,000 per year of assessment

False statements to reduce payments on account: up to the shortfall of tax

Failure to produce documents or obstructing an inspection: £300 plus daily penalty of up to £60

The Upper Tribunal may impose a penalty where significant tax is at risk.

Corporation tax self-assessment

 2020/21
1 day late £100
3 months late Another £100
6 months late HMRC will estimate your corporation tax bill and add a penalty of 10% the unpaid tax
12 months late Another 10% of any unpaid tax
Late 3 times in a row The £100 penalties are increased to £500
For failure to notify liability or for inaccuracies in a return:

Failure not deliberate: up to 30% of tax

Failure deliberate but not concealed: up to 70% of tax

Failure deliberate and concealed: up to 100% of tax

PAYE
Form P11D(b) where due £100 per 50 employees for each month or part month late 
PAYE - Real-time information (RTI)  
- For each late return
- First return in a year filed late  No penalty, except for annual schemes
- Thereafter: based on number of employees. For all PAYE schemes.

- 1-9: £100
- 10-49: £200
- 50-249: £300
- 250 or more: £400
Automatic late payment penalties will apply at some point when PAYE is paid late by the employer. Until then, interest is charged on late payments, with a penalty raised on a risk assessed basis.

CIS
Monthly return - CIS 300
Late return £100
Plus: 2 months late £200 plus penalties above
Plus: 6 months late £300 or 5% of the CIS deductions shown on the return, whichever is the higher. This is as well as the penalties above
Plus: 12 months late In serious cases you may be asked to pay up to £3,000 or 100% of the CIS deductions shown on the return (whichever is higher). These are as well as the penalties above
Maximum penalty for late registration £3,000
Failure to provide information £3,000

VAT: default surcharge periods
First return in surcharge period 2% of the VAT outstanding at the due date (see below)
Second return in surcharge period 5% of the VAT outstanding at the due date
Third return in surcharge period 10% of the VAT outstanding at the due date
Fourth and subsequent return in surcharge period 15% of the VAT outstanding at the due date

Notes

  • VAT default surcharge also applies when the VAT return has been submitted but the VAT remains unpaid. The penalty is calculated at the rate shown applied to the VAT outstanding. Late repayment returns still register as a default, but no penalty is due.
  • Surcharges at 2% and 5% are not levied if the amount of the surcharge does not exceed £400, but the default still registers and increases the potential surcharge for the next default.
  • Where the 10% and 15% surcharges are less than £30, a minimum £30 surcharge is applied.

Trustee registration service penalties

There is a requirement to register using the trustee registration service by the due date of 31 January after the end of the tax year in which the trustees pay tax on trust assets or income and also a requirement to notify any change of information by the due date of 31 January after the end of the tax year in which the trustees pay tax on trust assets or income.

HMRC will charge a fixed penalty to reflect the period of delay:

  • Registration made up to 3 months from the due date - £100 penalty
  • Registration made three to 6 months after the due date - £200 penalty
  • Registration more than 6 months late - either 5% of the tax liability or £300 penalty, whichever is the greater sum.

Registration more than 6 months late - either 5% of the tax liability or £300 penalty, whichever is the greater sum.

Late payment penalties - PAYE, NIC and CIS tax

There is a penalty regime under which late payment of PAYE, NIC and related liabilities during the tax year will attract a penalty. The first late payment in the tax year is not liable to penalties but subsequent late payments attract a penalty base on the total number of late payments in the tax year. These penalties are issued automatically, and notices are sent out quarterly. The regime is currently operated on a risk assessed basis, charging penalties to employers who are regularly late or owe significant sums of money.

Tax is due by the 19th of the following month or the 22nd if paid electronically. Small employers may use the quarterly payment scheme. 

Limited company accounts: late-filing penalties

Penalties for late filing are as follows:

Length of delay, based on the filing date Private company Public company
Not more than 1 month £150 £750
More than 1 month but not more than 3 months £375 £1,500
More than 3 months but not more than 6 months £750 £3,000
More than 6 months £1,500 £7,500

The penalty is doubled if a company files its accounts late in two successive financial years.