From 6 April 2027, HMRC will implement a new penalty regime for Self-Assessment taxpayers, replacing the automatic £100 late filing penalty with a points-based system. Under the new framework, each missed filing deadline results in one penalty point, and a fixed £200 penalty is charged once a threshold is reached.
How the Points System Works
The threshold depends on filing frequency. For annual submissions, 2 points trigger a £200 penalty; for quarterly submissions, 4 points trigger the fine. Each subsequent late return after reaching the threshold incurs an additional £200 penalty. Points below the threshold automatically expire after two years.
Changes to Late Payment Penalties
Alongside filing changes, HMRC is increasing penalties for late payment of income tax from 1 April 2027. Interest will continue to accrue at HMRC's prevailing rate. For taxpayers with business, property, or investment income, these penalties could escalate quickly if payment is significantly delayed.
Expert Advice
PEM, a tax advisory firm, warns: "Where there are cash-flow difficulties or concerns about meeting a payment deadline, early action will be key." They add: "HMRC's Time to Pay arrangements may be available in some cases, but these should be explored before penalties begin to accrue."
Although the changes take effect in 2027, they underscore the importance of good compliance habits. Taxpayers are advised to plan ahead to avoid penalties.
