Don't pay your £100 Self Assessment penalty

25 February 2011

picture by Sammi_babe at Think the £2.50 is for me.

Are you one of those lucky* people who have just had a letter from HMRC land on your mat? No, unfortunately this is not one of those occasions where they have suddenly discovered they owe you several hundred pounds, nor is it another notification that they are writing off some tax you genuinely do owe. No, this is one of those letters informing you that you are being landed with a £100 penalty for late submission of a tax return.

Of course, everybody knows that tax returns are due in on 31 January don’t they- after all, Moira was hiding in our cupboards under the stairs for months making sure we knew, so there’s no excuse for missing the deadline. Well, OK, there is a list of reasonable excuses, and if you find yourself in possession of one of these limited edition letters, you may want to read them very carefully.

What’s not reasonable

But before going into the ins and outs of what is reasonable, let’s look at things that are not a reasonable excuse.

First and foremost, forgetting or being too busy are not going to cut the mustard, nor is failing to realise that paper returns were actually due by 31 October and you should have gone online. Blaming your agent won’t get you anywhere either- at least not with the Revenue, as it is your responsibility to make sure your return is file on time, but you may be able to claim against the agent personally. Finally, thinking your tax return was just a bit too hard, which may be valid given your individual brain power, is unfortunately not a valid excuse.

So give me something to go on…

Of course there are genuine circumstances where circumstances prevailed to prevent you from completing your return, and HMRC helpfully publish a list on their website of things they consider, sometimes grudgingly, to be reasonable excuses:

  • documents being lost through theft, fire or flood that you can't replace in time
  • not just a serious illness, but a life-threatening illness, eg a heart attack that prevents you dealing with your tax affairs
  • the death of a partner shortly before the filing date – the list does not specifically refer to children, but guidance elsewhere includes close relatives so if your nippers kick the bucket, you should be OK, provided you can show that you'd taken steps to prepare the return before this happened if necessary
  • industrial action by Royal Mail over a lengthy period of time
  • issues with the online filing service, where no work-round was available - you'll need to provide the error message you received

If you want to appeal against the penalty you need to respond on a form SA355, which can be downloaded from the HMRC website, tick the relevant box, and provide details of the extremely reasonably excusing situation you found yourself in at the end of January.

What if the penalty is, well, wrong?

Of course it is (just about) conceivable that a Government department might, perchance, get it wrong. Occasionally. And if you genuinely did submit your return on time, you are gonna be mighty peeved with a £100 bill.

Unfortunately, the burden of proof is on you to show that you did, in fact, submit your return on time. If you did it online, as you would have had to after 31 October, you should have received an email acknowledgement from the Government Gateway quoting a unique IR mark number that you can quote back to them to prove your return was submitted in time.

What if the penalty is right?

It could be that you plain forgot, it could be that you forgot to press send, or that you lost some vital piece of information that delayed you completing your return. If your return genuinely was late, you may think it’s fair dos.

However, the 2009/10 tax return, the one that was due on 31 January 2011 was the last return where, if you had paid all the tax you owed by 31 January (which was also the payment deadline) you would actually be OK, as the amount of your Self Assessment penalty is 'capped' for some individuals (but not partnerships) which means that the penalty can't be more than the amount of tax unpaid at 31 January. If this does apply to you, the penalty should be automatically adjusted, but if not, ring up your local Tax Office and point this out to them.

If you didn’t submit your return on time, and you didn’t pay your tax, quite frankly, it’s tough. But what did you expect? Numpty.

*may not actually be lucky in the recognised sense of the word



  • Mark C.
    So if you're unaware you need to fill in a tax return until after the due date, and then fill in a tax return which backs up the fact that you owe no tax beyond what has already been deducted (as has happened to me before), from next year you'll have to pay a hundred nicker for late filing, right? Nice.
  • Mark
    No. The penalty is the lessor of £100 or the tax payable. Therefore if you owe no tax but submit a late tax return the penalty should be nil.
  • Sam T.
    Mark- the rules have changed with effect from tax returns for 2010/11 onwards. Now the penalty will stand (as it currently does for partnerships) regardless of liability, or lack thereof. Sorry. Mark C- nicely summed up ;)
  • An a.
    Except it is now enforceable, and HMRC are outsourcing debt collection after about a week. It's better to pay it, then reclaim it if it shouldn't have been applied - not saying I agree with it, but thats the best way to deal with it as it's taking months for HMRC to deal with refunds.
  • not a.
    Except perhaps those who don;t earn as much as you obviously do might not have £100 spare or have the 'months' to wait for HMRC to give it back. Some people are in a different world methinks.

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