The deadline slipped past, the £100 penalty notice has landed, and you want to know how bad this gets. The honest answer: the £100 is the floor, not the ceiling. The longer a late return sits, the more the charges stack up, and late filing penalties are separate from late payment penalties.
The good news is that the damage is fixable, and often smaller than the panic suggests. If you act quickly, you can stop the meter running and, in some cases, cancel the penalty altogether.
This guide is for self-employed people, sole traders and landlords who file online and have missed the 31 January deadline. We'll set out exactly what HMRC charges, in what order, and the practical steps to take this week.
What is the Self Assessment filing deadline? {#deadline}
For online returns, the deadline is midnight on 31 January following the end of the tax year. So a 2024/25 return (the year ending 5 April 2025) had to be filed online by 31 January 2026.
Two other dates matter:
| What | Deadline |
|---|---|
| Register for Self Assessment | 5 October following the end of the tax year |
| Paper tax return | Midnight 31 October following the tax year |
| Online tax return | Midnight 31 January following the tax year |
| Pay the tax you owe (balancing payment) | Midnight 31 January following the tax year |
| Payments on account | 31 January and 31 July |
The filing deadline and the payment deadline fall on the same day, 31 January. That's the trap. Miss it and you can trigger two different sets of penalties at once, which we'll keep separate below.
What is the penalty for filing late? {#filing-penalties}
Late filing penalties don't depend on how much tax you owe. You're charged even if your bill is zero or you're due a refund. Here's how they build up the longer the return is outstanding:
| How late the return is | Filing penalty |
|---|---|
| 1 day late | £100 fixed penalty |
| 3 months late | £10 a day, for up to 90 days (maximum £900) |
| 6 months late | A further 5% of the tax due, or £300, whichever is greater |
| 12 months late | Another 5% of the tax due, or £300, whichever is greater |
These add together. At the six-month point a return that was never filed could already carry £100 + £900 + £300, which is £1,300 in filing penalties alone, before HMRC looks at the tax itself.
That's why filing the return matters even more than paying the bill. The daily penalties only stop once the return is in.
What are the penalties for paying late? {#payment-penalties}
Get help with your tax return →
Paying the tax late is charged separately from filing late. The late payment penalties are based on the tax that's still unpaid:
| How late the payment is | Late payment penalty |
|---|---|
| 30 days late | 5% of the tax unpaid |
| 6 months late | A further 5% of the tax unpaid |
| 12 months late | A further 5% of the tax unpaid |
On top of the penalties, HMRC charges interest on the amount owed from the day after the due date until you pay. The late payment interest rate is set at the Bank of England base rate plus 4%. As of 9 January 2026 that rate is 7.75%. Interest runs daily, so it keeps adding up until the balance clears.
In practice, the mistake we most often see is people assuming "I'll deal with it when I have the money." Interest and penalties don't wait for your cash flow. If you can't pay in full, there's a better route, which we cover below.
How much could it actually cost? An illustrative example {#worked-example}
Illustrative example. Tom is a self-employed plumber. His 2024/25 tax bill is £4,000, due on 31 January 2026. He doesn't file or pay until late August 2026, roughly seven months late. Here's how the charges stack up.
Filing penalties:
| Charge | Amount |
|---|---|
| Fixed penalty (1 day late) | £100 |
| Daily penalties (3 months+, 90 days at £10) | £900 |
| 6-month penalty (greater of £300 or 5% of £4,000 = £200) | £300 |
| Filing penalties subtotal | £1,300 |
Late payment penalties:
| Charge | Amount |
|---|---|
| 30 days late (5% of £4,000) | £200 |
| 6 months late (5% of £4,000) | £200 |
| Late payment penalties subtotal | £400 |
So before interest, Tom's £4,000 bill has grown by £1,700 in penalties, a total of £5,700. He also owes daily interest at 7.75% on the unpaid £4,000 from 1 February until he pays. Had he reached the 12-month mark, a further £300-or-5% filing penalty and a third 5% late payment penalty would apply.
The figures are illustrative, but the structure is exactly how HMRC charges work. The single biggest lever Tom had was filing the return early to stop the £10-a-day clock.
How do I stop the penalties getting worse? {#stop}
Three moves, in order.
1. File the return now, even if you can't pay. Filing stops the daily £10 penalties and the later 6 and 12-month filing penalties from building. A return and a payment are two separate obligations, so get the return in first.
2. Pay what you can, as soon as you can. Late payment penalties and interest are both based on the unpaid balance, so every pound you pay reduces what they're calculated on. Paying part of the bill is better than paying none.
3. Set up a Time to Pay arrangement if you can't clear it. HMRC lets many people spread a Self Assessment bill in instalments through a Time to Pay plan, often arranged online for smaller balances. Interest still applies, but a plan you stick to can stop further late payment penalties. Getting the numbers and the affordability right first is where an accountant helps.
If you're behind because your records are a mess, that's the real problem to fix. Our self-assessment service gets the return filed correctly and fast, and our tax advisory team can help you negotiate a realistic payment plan.
Can I appeal a late filing penalty? {#appeal}
Yes, if you have a "reasonable excuse". You normally need to appeal within 30 days of the date on the penalty notice, and the return still has to be filed for the appeal to succeed.
HMRC gives examples of what usually counts as a reasonable excuse, including:
- A death of a close relative shortly before the deadline
- An unexpected stay in hospital, or a serious or life-threatening illness
- A failure of HMRC's online services
- A fire, flood or theft that stopped you completing the return
- Service issues with your software, or unexpected postal delays
- A disability or mental illness that affected your ability to file
And what generally does not count:
- You didn't have the money to pay
- You found the HMRC system too hard to use
- You didn't get a reminder from HMRC
- You made a mistake on the return
- You relied on someone else to file and they let you down (unless the reason itself was outside your control)
You can appeal a £100 late filing penalty using HMRC's online service, or use form SA370 for any late filing or late payment penalty. Whatever the excuse, file the outstanding return first. An appeal without the return in is going nowhere.
Want this sorted properly? Book a free 20-minute call with a Zmartly accountant. We'll get your return filed, work out the real penalty position, and handle any appeal or Time to Pay plan with HMRC for you. Talk to a Zmartly accountant.
Frequently asked questions {#faqs}
Do I still get a penalty if I owe no tax?
Yes. The £100 fixed penalty for filing late applies even if your tax bill is nil or you're due a refund. Late filing penalties are charged for missing the deadline, not for owing money. The percentage-based filing penalties at 6 and 12 months are based on tax due, so they'd be lower or nil, but the £100 and the daily charges still apply.
Are late filing and late payment penalties the same thing?
No. They're separate. Filing late triggers the £100 fixed penalty, then daily and percentage penalties. Paying late triggers separate penalties of 5% of the unpaid tax at 30 days, 6 months and 12 months, plus interest. You can be charged both at the same time if you miss the 31 January deadline for filing and payment.
How much interest does HMRC charge on late tax?
HMRC charges late payment interest on overdue tax at the Bank of England base rate plus 4%. As of 9 January 2026 that rate is 7.75%. Interest runs daily from the day after the payment was due until you pay in full, so it keeps growing while the balance is outstanding.
What happens if I can't afford to pay my tax bill?
File the return on time anyway to avoid filing penalties, then set up a Time to Pay arrangement with HMRC to spread the cost in instalments. Interest still applies, but sticking to an agreed plan can stop further late payment penalties. Getting the affordability right before you commit is where professional help pays off.
How long do I have to appeal a penalty?
You normally have 30 days from the date on the penalty notice to appeal, and you must have a reasonable excuse. The outstanding return also needs to be filed. Late appeals can sometimes be accepted if you explain the extra delay, but it's far safer to act within the 30 days.
Key takeaways
- The £100 fixed penalty is just the start; daily and percentage penalties stack up the longer you wait.
- Filing late and paying late are charged separately, and both can apply at once.
- File the return first to stop the £10-a-day clock, then pay or set up a Time to Pay plan.
- You can appeal within 30 days if you have a reasonable excuse, but the return must be filed.
