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June 2024 | How to avoid fines from HMRC

No one likes paying more tax than necessary, but if you don't comply with HMRC's rules, you could face penalties and interest if issues aren't resolved promptly.

Here, we outline some common fines from HMRC and how to avoid them.


Anyone required to file a self-assessment return should be aware that paper returns are due by October 31, and online returns are due by January 31 of the following year for the previous tax year. Missing these deadlines will result in a £100 penalty. If the return is more than three months late, an additional £10 per day will be charged, up to a maximum of £900.

If you still fail to file, you can face an extra £300 fine for not filing before six months, or a penalty of 5% of the tax due, whichever is higher. You would face an additional 5% of tax due or £300 penalty, again whichever is higher, if you have still not filed the return after 12 months. So, these fines can stack up quickly.

Late payments will also incur penalties - a penalty of 5% of the tax due will need to be paid if the tax has not been paid within 30 days of it being due. A further 5% will be charged additionally at six months and 12 months if the payment has still not been made. So, you should make sure you are filing on time and paying on time whenever you can, which is something your accountant can help you with.

If you are unable to pay your tax for any reason, you should get in touch with your accountant and HMRC as soon as possible to work out a payment plan. Once this is in place, these penalties should not be applied. You may have a reasonable excuse, such as a close relative dying close to when the tax return was due, or that you were having to stay in hospital. If that is the case, then tell your accountant or HMRC directly to stop the penalties stacking up.


If you fail to notify HMRC that you should be paying a specific tax, such as VAT for example if your business breaches the £90,000 VAT registration threshold, then you could face a 'failure to notify' penalty of between 0% and 100% of the tax owing.

You may also face a similarly applied inaccuracy penalty, but whether you will be charged at all will depend on whether HMRC feels your mistakes have been careless, deliberate, or deliberate and concealed.

Keeping good records and making sure you are on top of your administration is the best way to avoid these kinds of penalties. You should also keep in touch with your accountant if you have any problems that could see you miss filing deadlines or payments, as they will be able to help you.


You should never leave your taxes to chance, especially if you feel you might do something wrong. So, please ask us for advice on 01709 327 215 or via email at info@branagans.co.uk.and we can explain everything you need to know.

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