UK households are now facing a potential £70 weekly charge after HMRC confirmed a daily penalty rule for late tax returns. The tax authority, operating under the Labour Party government, has warned that anyone required to submit a tax return will incur penalties if they file late or fail to pay their tax bill on time.
Penalty Structure for Late Self Assessment Returns
HMRC has outlined a clear penalty system for late Self Assessment tax returns and payments. If you register after 5 October and do not settle your full tax bill by 31 January, you may be subject to a 'failure to notify' penalty. This penalty is calculated based on the outstanding amount and will be imposed within 12 months after HMRC receives your tax return.
Late Filing Penalties
- Initial penalty: £100
- After 3 months: Additional daily penalties of £10 per day, up to a maximum of £900
- After 6 months: Further penalty of 5% of the tax due or £300, whichever is greater
- After 12 months: Another 5% or £300 charge, whichever is greater
The £10 per day warning means households risk paying £70 across a week. Additionally, you will face penalties of 5% of the unpaid tax at 30 days, 6 months, and 12 months. Interest will also be charged on the amount owed.
Debt Collection and Enforcement
HMRC stated: "If you do not respond to HMRC or refuse to pay what you owe, we may either visit you at your home or business address to help us understand your circumstances so we can work with you to settle the tax you owe OR use a debt collection agency to discuss settling your debt."
During a visit, HMRC may inquire about your financial situation and ability to pay. They will attempt to agree on a settlement method, which could be a full payment or instalments through a Time to Pay arrangement. If possible, they will take payment directly from you during the visit, either in full or as a part payment under a Time to Pay agreement.
