HMRC imposes penalties for late filing, late payment, and inaccuracies in the Self-Assessment tax return. Here are the key penalties associated with the HMRC Self-Assessment:
Late Filing Penalties:
- If you miss the deadline for filing your Self-Assessment tax return, which is usually 31st January following the end of the tax year, you will incur an initial penalty of £100. This penalty applies even if you have no tax to pay or have already paid the tax you owe.
- If you continue to delay filing your tax return beyond three months after the deadline, additional penalties of £10 per day may be imposed, up to a maximum of £900.
- After six months of delay, a further penalty of 5% of the tax due or £300 (whichever is greater) will be added.
- If the tax return remains outstanding after twelve months, an additional penalty of 5% or £300 (whichever is greater) will be applied.
Late Payment Penalties:
- If you fail to pay the tax you owe by the payment deadline, which is also 31st January, you will incur late payment penalties.
- Initially, if you miss the payment deadline, you will be charged interest on the outstanding amount.
- After 30 days, a 5% penalty will be added to the outstanding tax amount.
- If the tax remains unpaid after six months, an additional 5% penalty will be applied.
- Further penalties of 5% can be added if the tax is still unpaid after twelve months.
Inaccuracies or Errors Penalties:
- If there are inaccuracies or errors in your Self-Assessment tax return, HMRC may impose penalties based on the nature and seriousness of the inaccuracies.
- If the errors are considered careless or deliberate but not concealed, penalties can range from 0% to 30% of the additional tax due.
- If the errors are deliberate and concealed, penalties can range from 20% to 100% of the additional tax due.
- If you voluntarily disclose inaccuracies or errors to HMRC before they discover them, the penalties can be reduced.
It’s important to note that these penalties can vary depending on individual circumstances, and there may be additional penalties for more severe cases of tax evasion or fraud. It is advisable to consult with a tax professional or visit the official HMRC website for the most accurate and up-to-date information regarding Self-Assessment penalties.