Every January, a large number of people miss the Self Assessment filing deadline. ICAEW noted in early 2025 that over one million taxpayers were facing the initial £100 penalty for the previous tax year alone. If you’re wondering what happens if you file your tax return late, the short answer is: HMRC charges you, and those charges increase the longer you leave it.

What tends to catch people out is that the penalties for filing late and the penalties for paying late are two entirely separate things. You can owe both at the same time, on top of interest on any unpaid tax. We’ve helped plenty of clients work through this — sometimes when the situation has been building quietly for months. The good news is that there are things you can do, but none of them get easier with time.

For the 2025–26 tax year, HMRC sets two separate filing deadlines depending on how you submit. If you file a paper return, the deadline is 31 October 2026. If you file online (which is how the vast majority of people do it), the deadline is 31 January 2027.

The payment deadline is always 31 January — regardless of how you file and regardless of when your return is submitted. So even if you file early, your tax bill is still due by 11:59pm on 31 January 2027.

One thing worth flagging: if you registered for Self Assessment after 5 October 2026, HMRC may give you a different filing deadline to account for the late registration. But the payment deadline of 31 January 2027 still applies. That catches some people off guard — they assume a later registration means more time to pay, and it doesn’t.

Trustees of registered pension schemes and non-resident companies are required to file paper returns, with their deadline falling on 31 January 2027 (they cannot use the online system). Most sole traders, landlords, and contractors reading this will be filing online, so 31 January is the date that matters.

The penalty structure for a late Self Assessment return works in stages, and the charges add up faster than most people expect.

• Day one late: An automatic £100 penalty applies the moment you miss the deadline, even if you owe no tax at all.
• After 3 months: HMRC adds daily penalties of £10 per day, for up to 90 days. That’s a maximum of £900 on top of the initial £100.
• After 6 months: A further penalty of 5% of the tax due, or £300, whichever is greater, is charged.
• After 12 months: Another charge at the same rate — 5% of tax due or £300, whichever is greater.

So if you owe £5,000 in tax and your return is 12 months late, you’re looking at £100 plus up to £900 in daily penalties, plus two lots of 5% of £5,000 — that’s £500 each time. The total penalty exposure before interest runs close to £2,000 on top of the original tax bill.

HMRC does provide an online calculator to estimate penalties and interest, though it has limitations — it can’t factor in any payments already made or credits from previous years. It’s a useful starting point, but a qualified accountant can give you a more accurate picture of where you stand.

Filing your return late and paying your tax late are treated as two different problems by HMRC, and they charge for both independently. A lot of people assume that because they’ve sorted the return, the payment side will look after itself — that’s not how it works.

Late payment penalties are calculated as a percentage of the tax unpaid:

• 30 days late: 5% of the unpaid tax.
• 6 months late: A further 5% of the tax still outstanding.
• 12 months late: Another 5% on top.

On top of the percentage charges, HMRC also applies interest on the outstanding amount from the date it was due. Interest rates are linked to the Bank of England base rate and are reviewed periodically, so the figure changes — but it’s been running at a meaningful rate over recent years.

The combined effect of filing penalties, payment penalties, and interest can turn a manageable tax bill into a significantly larger problem. If you’re already past the deadline and haven’t paid, the priority should be paying as much of the tax as you can, as soon as you can, to limit the interest accruing. Getting the return filed should happen at the same time, not afterwards.

Yes, and it’s worth knowing how this works before you assume the penalty is unavoidable.

HMRC will cancel or reduce a penalty if you have a reasonable excuse for missing the deadline. What counts as reasonable is a matter of judgement, but genuine illness, a bereavement, or a serious technical failure with HMRC’s own systems have all been accepted in the past. Forgetting the deadline, or being busy, generally won’t be.

Appeals can be made online or by post using form SA370 for individuals, or SA371 for partnerships. ICAEW guidance confirms you have 30 days from the date of the penalty notice to appeal. If you think you have grounds, don’t sit on it.

One practical point worth flagging: if you’re appealing, you should still consider paying the penalty in the meantime. If the appeal is rejected, interest accrues on the unpaid penalty from the original due date. If the appeal succeeds, HMRC repays what you’ve paid, with interest, provided there’s no other outstanding tax. Paying while you appeal protects you from the interest exposure if things don’t go your way.

If you believe you don’t actually need to be in Self Assessment at all, you can ask HMRC to cancel the return requirement and any associated penalties — that’s a separate process, and worth pursuing if the registration was made in error.