HM Revenue and Customs (HMRC) will issue daily fines of up to £900 to taxpayers that break a ‘three month rule’.
The government department is reminding taxpayers there’s now only a matter of weeks to go to file and pay Self Assessment tax returns for the 2024 to 2025 tax year, with the deadline set for 11.59pm on January 31, 2026. While more than six million people have kicked off the new year with their tax affairs in order, a whopping 5.65 million people are yet to file their tax returns before the looming deadline at the end of this month. HMRC has warned that those who miss the January 31 deadline face an initial late filing penalty of £100, even if there’s no tax to pay.
But the penalties will continue to increase the longer you leave it, with taxpayers facing daily penalties if they haven’t filed three months after the deadline.
At this point, HMRC will issue additional daily penalties of £10 per day, up to a maximum of £900. This will increase yet again after six months with a further penalty of 5% of the tax that is due, or £300 – whichever is higher. After 12 months, another 5% – or £300 – will be added.
If you pay your tax late, you’ll also get penalties of 5% of the tax unpaid at 30 days, six months and 12 months. If tax remains unpaid after the deadline, interest will also be charged on the amount owed in addition to the penalties above.
HMRC said: “You must submit your online tax return by 11:59pm on 31 January 2026 or you’ll get a late filing penalty. If you want to pay your Self Assessment bill through your tax code, you must submit it by 11:59pm on 30 December 2025. If you miss this deadline, you’ll have to pay another way. You can submit your return any time on or after 6 April 2025 up to the deadline.”
Reasons for not paying your tax bill, or arranging a payment plan, by the January 31 deadline will be considered individually and only those who provide a reasonable excuse may avoid a penalty, while those without will face a fine. HMRC says a reasonable excuse can include any of the following:
- your partner or another close relative died shortly before the tax return or payment deadline
- you had an unexpected stay in hospital that prevented you from dealing with your tax affairs
- you had a serious or life-threatening illness
- your computer or software failed just before or while you were preparing your online return
- service issues with HMRC online services
- a fire, flood or theft prevented you from completing your tax return
- postal delays that you could not have predicted
- delays related to a disability or mental illness you have
- you were unaware of or misunderstood your legal obligation
- you relied on someone else to send your return and they did not
You must send your tax return or payment as soon as possible after your reasonable excuse is resolved and you cannot blame a cheque being bounced or a failed payment for missing the deadline, or say you submitted it late because HMRC didn’t send you a reminder.
Anyone unable to pay their tax bill in full by the deadline can spread the cost using HMRC’s online ‘Time to Pay’ system, but you must file your Self Assessment tax return before setting this up.
If you can’t pay your tax bill in full, or you owe less than £30,000 and are eligible, you can apply online without having to contact HMRC directly, while those that owe more than £30,000 can still apply but need to contact HMRC.
Myrtle Lloyd, HMRC’s Chief Customer Officer, said: “New Year is a great time to start afresh. What better way than to ensure your tax affairs are in order for another year than completing your tax return. If you have yet to start, the clock is ticking, go to GOV.UK and start today.”