HMRC to issue £10 daily fine for major tax mistake from today as penalties explained

William Morgan
·2-min read
HMRC will start issuing fines from today -Credit:Getty Images
HMRC will start issuing fines from today -Credit:Getty Images


The HM Revenue and Customs (HMRC) deadline for late tax returns passed today, May 1, meaning anyone who has failed to file their self-assessment for the 2022/2023 tax year is now facing a hefty £10 daily fine - which can add hundreds of pounds onto your late tax bill.

This is on top of any other fines gained for missing the original January deadline for filing tax returns, which more than a million people missed this year landing them with an immediate £100 fine.

The vast majority of those late-filers have now paid HMRC their due, but they are not only the fines that you can rack up when you file your tax returns. Understanding why your tax bill might have additional charges on it is not always easy, with fines for mistakes and errors as well as for sending your forms back late.

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Finance expert, John Clemming from For Kredit has some practical advice on how to avoid a hefty fine. He explains the four main ways to fall foul of HMRC rules on tax filings below.

Filing Your Tax Return Late

John said: "One of the most straightforward fines from HMRC comes from failing to file your tax return on time.

"The deadlines are usually clear—January 31 for online returns and October 31 for paper returns concerning the previous tax year. If you miss this deadline, you immediately incur a £100 fine. If the return is over three months late, additional charges can accrue at £10 per day, up to a 90-day maximum of £900."

Paying Your Tax Late

John added: "Similarly, failing to pay the tax you owe by the due date leads to penalties.

"Late payment incurs an initial 5 per cent of the owed taxes if 30 days late, another 5 per cent if six months late, and an additional 5 per cent if 12 months late. These can substantially increase the amount you owe, so it's essential to plan your finances accordingly."

Inaccuracy Penalties

John said: "HMRC imposes fines for errors on tax returns or documents that understate your tax liability.

"These penalties depend on whether HMRC views the inaccuracies as careless, deliberate, or deliberate and concealed. The fines can range from 0 per cent up to 100 per cent of the unpaid taxes for serious cases, highlighting the importance of accurate and honest reporting."

Failure to Notify

John warned: "If your tax status changes and you do not inform HMRC, you may face a 'failure to notify' penalty.

"This situation typically arises when individuals or businesses need to register for VAT or self-assessment but fail to do so on time. The penalties are calculated similarly to inaccuracies and can be as severe, depending on the amount of tax owed and how long the failure has continued."

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