Approximately one million taxpayers across Britain are now facing escalating financial penalties that could reach as high as £900.
Those who failed to submit their Self Assessment tax return by thecut-off have already been hit with an automatic £100 fine from HM Revenue and Customs, regardless of whether they actually owed any tax.
Graeme Donnelly, CEO and founder of 1st Formations, has urged those who failed to submit their Self Assessment returns by January 31, 2026 to take immediate action.
“If you’ve missed the Self Assessment tax return deadline, it’s important to act immediately,” he said. “HMRC imposes penalties in stages: you’ll have received an automatic £100 fine when your return was late, even if you didn’t owe any tax or had already paid.”
The penalty structure becomes increasingly severe for those who continue to delay. After three months of non-compliance, HMRC begins charging £10 per day, accumulating to a maximum of £900 over 90 days.
“After 3 months, a daily penalty of £10 is charged, up to a maximum of £900,” Mr Donnelly explained.
“The financial consequences worsen further for prolonged delays. Returns still outstanding after six months trigger an additional charge of either five per cent of the tax owed or £300, whichever sum is greater.
“If your return is still outstanding after 6 months, HMRC will impose an additional penalty of five per cent of the tax owed or £300, whichever is greater,” Mr Donnelly added. “A further penalty of the same amount applies after 12 months.”
Interest also accrues on any outstanding tax until full payment is received.
The scale of HMRC’s enforcement efforts is substantial. Last year, the tax authority collected £325million in fines and interest charges from taxpayers who paid their self-assessment bills late, according to national accounting firm UHY Hacker Young.
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At least 600,000 individuals were penalised for missing the January deadline in the previous year.
Neela Chauhan, Partner at UHY Hacker Young, said: “The cost of not paying your self-assessment tax can rise quickly. Initial penalties may be relatively small, but interest and further charges add up and can really start hurting quite quickly.”
The figures reveal a broader problem with tax compliance. HMRC estimates that £8.7billion in self-assessment tax went unpaid last year, representing 12.5 per cent of the £69.6billion it anticipated collecting.
For those struggling to meet their obligations, HMRC provides a ‘Time to Pay’ arrangement enabling taxpayers to spread payments across several months
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GETTYFor those struggling to meet their obligations, HMRC provides a ‘Time to Pay’ arrangement enabling taxpayers to spread payments across several months. Eligibility depends on the amount owed and any existing HMRC debts.
Ms Chauhan advised: “Those finding it hard to pay their tax bill on time should set up a payment plan as early as possible.
“The Government is facing a fiscal black hole, so they should expect HMRC to become even tougher on tax debt collection.”
Taxpayers should also scrutinise any penalties received, as many are overturned upon challenge due to automatic application errors
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GETTYTaxpayers should also scrutinise any penalties received, as many are overturned upon challenge due to automatic application errors.
Filing through GOV.UK or the HMRC app remains the quickest method to resolve outstanding returns.
Importantly, missing the deadline does not affect credit scores, and HMRC will not publicly disclose late filings.