What penalties exist for incorrect or late tax returns?

Each year, hundreds of thousands of people will either submit a Self Assessment tax return late or incorrect.

If you file your return late, the following penalties apply:

  • £100 if you are one day late
  • £10 for each additional day (capped at 90 days) plus £100 initial fine if you are up to 3 months late
  • Either £300 or 5% of the tax due (whichever is higher), on top of the penalties listed above, if you are 6 months late
  • An additional £300 or 5% of the tax due, plus the penalties listed above if you are 12 months late

If you make a mistake on your tax return, HMRC will determine whether you have been careless with your return or if you were trying to mislead them over how much tax you owe.

  • No penalty if you have made an honest mistake
  • 0% to 30% penalty if HMRC thinks you have been careless
  • 20% to 70% penalty if HMRC thinks you have underestimated your tax on purpose
  • 30% to 100% penalty if HMRC thinks you have underestimated your tax on purpose and tried to cover 

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