Cancellation of HMRC penalties

Most working people can avoid HMRC penalties altogether by submitting their Self Assessment on time. Filing promptly is always the safest approach. However, if a deadline has already passed and a penalty notice has landed on your doormat, do not rush to pay it — get in touch with us first. Our experience allows us to provide effective representation in a wide range of circumstances, including cases that may appear hopeless at first glance.

How HMRC penalties escalate

• One day late: an automatic £100 penalty, regardless of whether any tax is actually due.
• Three months late: an additional £10 per day, capped at £900 in total.
• Six months late: a further charge of 5% of the tax owed, or £300 — whichever is greater.
• Twelve months late: additional penalties that can rise to as much as 100% of the tax owed.

Since April 2011, HMRC has operated a tiered penalty regime for late filing and late payment. The longer the delay, the larger the fine. Following Brexit, certain inter-state agreements also allow HMRC to instruct bailiffs to recover outstanding debts across borders.

These penalties accrue on top of statutory interest, which continues to run on the unpaid tax — and the unpaid penalties themselves — until the debt is fully settled.

A penalty doesn't replace the return

Receiving and paying a late-filing penalty does not exempt you from submitting the underlying tax return. A common misconception is that the fine closes the matter — it doesn't. The return must still be filed, and further penalties continue to accumulate until it is.

We strongly encourage you not to delay. Our specialists may be able to have your penalties reduced or cancelled outright, depending on your circumstances. Get in touch and we will guide you through the next steps.