Approximately 1.1 million taxpayers who did not file their self-assessment tax return for the 2022/23 fiscal year by the 31 January 2024 deadline are now subject to a daily penalty of £10 imposed by HMRC.
This penalty commenced on 1 May 2024 and may continue for up to 90 days, potentially accumulating to £900. This fine is applicable even if no tax is due or a refund is owed. Additionally, HMRC levies separate penalties and charges interest at a high rate of 7.75% for late tax payments.
What to do?
- Submit an online tax return as soon as possible. This will not avoid penalties up to the date of submission but will prevent further fines accumulating.
- If there is information missing for 2022/23, submit a provisional return with estimated figures. The return should note which figures are provisional, why accurate figures are not available, and when accurate figures will be provided.
- HMRC will cancel penalties already charged if they have asked for a 2022/23 tax return in error. For example, if you have ceased self-employment or no longer rent out property.
HMRC can cancel a tax return within two years of the submission deadline, which means there is time to have a return for 2022/23 cancelled by 5 April 2025.
Reasonable excuse
You can appeal against the daily penalty if you can demonstrate a reasonable excuse, such as prolonged ill-health or bereavement. However, work pressure, lack of information or missing reminders from HMRC are unlikely to be accepted.
The challenge with appealing against the daily penalty is providing HMRC with a credible excuse running from the original filing date (31 January) through to the issue of penalties (from 1 May).
For more information, contact us on 01142 664 432 or email info@smh.group.
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