UK taxpayers face mounting penalties for late returns, with HMRC introducing a £10 daily charge starting today. Failure to act could result in fines surpassing £1,800, compounding earlier fixed penalties.
Starting today, HM Revenue and Customs (HMRC) is enforcing a new tier of financial penalties aimed at encouraging compliance with self-assessment tax return obligations. Taxpayers who missed the original 31 January deadline will now face a daily £10 fine, adding to the existing £100 automatic penalty.
This latest move signals a tougher stance from the tax authority as it seeks to reduce the number of late filers. According to TotallyMoney CEO Alastair Douglas, many individuals have still not submitted their tax returns, leaving them vulnerable to increasingly severe financial consequences.
Escalating Fines for Non-compliance
The newly imposed daily fine will continue for up to 90 days, potentially reaching £900 in total. This is in addition to the initial £100 penalty already applied to anyone who failed to submit their return by the statutory deadline.
Beyond the three-month mark, penalties increase sharply: after six months, taxpayers may be liable for a fine of 5% of the tax due or £300—whichever is higher. At the 12-month point, the penalty rises to another 5% or £300, again based on whichever figure is greater.
The interest rate for late payment remains high, currently set at 8.5%, compounding the financial pressure on those in arrears. All penalties must be paid within 30 days of issuance. HMRC allows payments via several methods, including bank transfers, cheques, or Direct Debit.
Payment Support and Contesting Penalties
Taxpayers facing financial hardship have been advised to explore the “Time to Pay” arrangement offered by HMRC, which allows individuals to set up a manageable payment plan. This facility is available through the HMRC website and applies to those unable to pay their bill in full.
According to HMRC, individuals who believe they have a “reasonable excuse” for their delay may appeal the penalties. Accepted reasons include serious illness, bereavement, or technical issues encountered on HMRC’s digital platforms. Appeals must be submitted with supporting evidence and within the timeframe specified on the penalty notice.
While the penalties are strict, the tax authority has stated that its focus remains on encouraging voluntary compliance. Douglas stressed the urgency of the situation, noting that “hundreds of thousands” may still be at risk of accumulating fines if they continue to delay.
