Late tax return – what’s your excuse?

17 January 2025

HMRC regularly publishes some of the ‘best’ excuses given by taxpayers for not submitting tax returns by the due date. Some, like the individual distracted from filing his return by his wife, his tax adviser and a bathtub, create a whole soap opera in miniature. Others, such as the claim that “my dog ate my tax return”, suggest the taxpayer isn’t really trying at all. What most excuses have in common is how little effect they have: HMRC officers may chuckle, but the bills will still mount up if you fail to file and pay on time.

Christmas festivities

The deadline for filing your UK self-assessment tax return and settling any remaining unpaid tax for the year to 5 April 2024 is 31 January 2025. In 2023, HMRC recorded 4,700 individuals filing their tax returns on Christmas Day - an increase of 1,500 on the year before. Records are silent on how many of these taxpayers were escaping cooking duties or Uncle Joe retelling the same anecdote he’s rolled out every year since 1999.

It may now be too late to use submitting your tax return to get you out of explaining who Taylor Swift is to your gran over the turkey, but here’s a reminder of the additional costs of delaying too long.

Penalties for late filing of your tax return

  • Initial penalty - £100.
  • Three months late – daily penalties of £10 per day, up to £900.
  • Six months late – 5% of the tax liability or £300, whichever is greater.
  • Twelve months late – further 5% of £300, whichever is greater.

In some cases, higher penalties can be levied if HMRC believes you are deliberately withholding information.

Penalties for late payment of tax

  • Initial penalty – 5% of tax unpaid.
  • Six months late – additional 5% on any tax still unpaid.
  • Twelve months late – further 5% of tax remaining unpaid.

Interest on late payments

The current rate of interest on late paid tax is 7.25%, meaning it could cost you a lot more if you do not pay on time. Interest is charged on a daily basis from the due date until the date payment is received by HMRC.

More excuses

Like the claim that “I caught my wife in the bath with my accountant”, some other more curious and fanciful excuses that have not been accepted by HMRC as reasonable, which may otherwise have mitigated penalties, include the following.

“Our business doesn’t really do anything”

This excuse failed to convince HMRC, but just because you receive a notice to file, it does not mean that a tax return is necessarily due. If you believe you don’t meet the requirements there is a quick online check you can use on HMRC’s website and, if relevant, you can contact HMRC ahead of the filing deadline to get your notice to deliver a tax return cancelled.

“My mother-in-law is a witch and put a curse on me”

HMRC did not accept this late filing explanation, but if you really are unable to file and pay on time, officers will listen. Just make sure you have a reasonable excuse as part of your penalty appeal – “I had an argument with my wife and went to Italy for five years” didn’t stop HMRC charging penalties, but engaging with the issue early can sometimes produce a better result.

For more information, please get in touch with Andrew Robins, Jenny Collins, Beth Mason or your usual RSM contact.