Taxation (UK) · Penalties for non-compliance

Penalties for Late Filing of Tax Returns (TX-UK)

Updated 11 October 2026 · Fact-checked

A late filing penalty applies when a return reaches HMRC after its deadline. It has a fixed part, £100 at first, then daily or further fixed amounts as lateness grows. After six and twelve months, tax-geared penalties apply. Work out how late the return is, then add each penalty that has been triggered.

Understand Penalties for Late Filing of Tax Returns

A filing penalty punishes you for not sending the return on time. It is separate from any penalty for paying tax late. You can file on time and pay late, or pay on time and file late. Each has its own penalty regime.

The penalty builds up in stages as the return gets later. The first stage is a fixed penalty of £100. It applies even if no tax is due, and even if the return is only one day late. Later stages depend on how many months late the return is.

For individuals (self-assessment), the stages are: £100 on day one; daily penalties of £10 per day for up to 90 days, starting once the return is three months late (maximum £900); then a tax-geared penalty at six months and again at twelve months. Each tax-geared penalty is the greater of 5% of the tax due and £300. Any higher penalty where information is deliberately withheld is not part of the standard ladder and is not given in the ACCA tables, so do not add it to a ladder calculation.

For companies, the stages are: £100 on day one; a further £100 once the return is three months late; then a tax-geared penalty of 10% of the unpaid tax if the return is more than six months late. A further 10% applies only if the return is more than twelve months late. A return that is between six and twelve months late therefore bears one 10% charge, not two. A company has no minimum tax-geared penalty, so none arises if no tax is unpaid.

Some study texts also give higher penalties where a company's return is late three times in a row (higher fixed penalties and a 20% rate). This is not in the ACCA tables, so check it against your study text before you rely on it.

The filing deadlines matter because the penalty clock starts from them. Individuals file online by 31 January after the tax year. Paper returns are due earlier, by 31 October after the tax year. A company files within 12 months of the end of its period of account. These amounts are not in the ACCA tax tables, so learn them. Do not confuse them with the VAT late payment penalties in the tables (3% and 6%), which are a different regime.

Key rules to remember

Individual: initial fixed penalty: £100 if the return is filed after the deadline; Applies even if there is no tax to pay.
Individual: daily penalties: £10 × days late (from 3 months late), maximum 90 days = £900; Only starts once the return is three months late. Do not count the first three months.
Individual: tax-geared penalty: Greater of 5% × tax due and £300, at 6 months late and again at 12 months late; Tax due means the tax outstanding that the return should have shown, not the total liability. Both the six-month and the twelve-month penalty use this same rule. Any higher amount for deliberate withholding of information is outside the standard ladder and the ACCA tables.
Company: fixed penalties: £100 (late) + £100 (more than 3 months late) = £200; Higher fixed penalties for repeated lateness are not in the ACCA tables. Check your study text before using them.
Company: tax-geared penalty: 10% × unpaid tax if more than 6 months late, plus a further 10% only if more than 12 months late; Between six and twelve months late, charge 10% once. Charge the second 10% only past twelve months. No minimum amount. A higher rate for persistent lateness is not in the ACCA tables, so check your study text before using it.
Filing deadlines: Individual online: 31 January after the tax year (paper: 31 October). Company: 12 months after the end of the period of account; Penalties run from these dates.

How to solve Penalties for Late Filing of Tax Returns questions

Use this method for any late filing penalty question. Take it one stage at a time and do not skip a stage the return has passed.

1Identify the taxpayer: individual or company. The rules differ.
2Find the filing deadline from the facts given.
3Compare the actual filing date with the deadline and work out how late the return is in months and days.
4Charge the initial £100 fixed penalty if the return is late at all.
5Individual: add £10 per day from three months late, capped at 90 days (£900). Company: add a second £100 if more than three months late.
6If more than six months late, add the tax-geared penalty: greater of 5% of tax due and £300 (individual), or 10% of unpaid tax (company). If more than twelve months late, add a second one: another greater of 5% and £300 for an individual, or a further 10% of unpaid tax for a company.
7Total the penalties and show each one on its own line. State clearly that late payment penalties and interest are separate.

Quickest way: Ladder method: 3, 6, 12 months

When to use it: Use in objective test questions and as a quick check in constructed response answers.

Write the ladder: day 1, 3 months, 6 months, 12 months.
Mark which rungs the return has passed.
Add the amount for each rung passed.
For individuals, remember the daily penalties: £10 a day, maximum £900, only after three months.
Check the tax-geared amount last: 5% or £300 (individual), 10% (company).

Common mistakes in Penalties for Late Filing of Tax Returns

Counting daily penalties from the deadline instead of from three months late.
Students see £10 per day and start counting at once.
Fix: Daily penalties begin only after the return is three months late. Cap them at 90 days, £900.
Forgetting the £300 minimum on the individual six-month penalty.
Students compute 5% of a small tax figure and stop.
Fix: Always compare 5% of tax due with £300 and take the greater.
Mixing up late filing and late payment penalties.
Both are triggered by a late deadline and both mention percentages.
Fix: Filing penalties depend on when the return is sent. Payment penalties and interest depend on when the tax is paid. Label each clearly.
Charging the company only £100.
Students copy the individual rule for the first stage.
Fix: A company that is more than three months late has a second £100, making £200.
Using the wrong filing deadline.
Students use the payment date, such as nine months and one day for a company.
Fix: A company's filing deadline is 12 months after the period of account ends. Individuals file online by 31 January after the tax year; paper returns are due by 31 October.
Applying the 10% company charge to total tax instead of unpaid tax.
Students overlook the word unpaid.
Fix: Use only the tax still unpaid at the relevant date, as the question states.

Worked examples

Example 1

Ravi is self-employed. His self-assessment return for 2024–25 was due online on 31 January 2026. He filed it online on 10 September 2026. The tax outstanding that the return should have shown was £8,000. Calculate the total late filing penalties.

Show the solution

The return is over six months late (six months after 31 January 2026 is 31 July 2026) but under twelve months.
Initial fixed penalty: £100.
Daily penalties: the return is three months late on 30 April 2026. Daily penalties of £10 then run for 90 days from 1 May 2026, ending on 29 July 2026. That is before 10 September 2026, so the maximum applies: 90 × £10 = £900.
Six-month tax-geared penalty: 5% × £8,000 = £400. This is greater than £300, so £400.
No twelve-month penalty because the return is under twelve months late.
Total: £100 + £900 + £400 = £1,400.

Answer: £1,400 in total (£100 + £900 + £400). Late payment interest and penalties are extra.

Example 2

Delta Ltd's accounting period ended on 31 March 2025. Its corporation tax return was due 31 March 2026. The company filed on 20 October 2026. This is its first late return. £40,000 of corporation tax was unpaid at the relevant date. Calculate the late filing penalties.

Show the solution

The return is more than six months late (six months after 31 March 2026 is 30 September 2026) but less than twelve months.
Fixed penalties: £100 for being late plus £100 for being more than three months late = £200.
Tax-geared penalty: 10% × £40,000 = £4,000.
No twelve-month penalty applies.
Total: £200 + £4,000 = £4,200.

Answer: £4,200 (£200 fixed plus £4,000 tax-geared).

Exam tips

Learn the ladder at 1 day, 3 months, 6 months and 12 months for both individuals and companies. These figures are not in the tax tables.
In a Section C answer, show each penalty on its own line with the rule. This earns method marks even if one figure slips.
Read the question for the actual filing date and the tax due. Do not use the wrong measure of tax.
Objective test questions are marked all or nothing, so check whether the taxpayer is an individual or a company before you calculate.
If asked to distinguish filing from payment penalties, say that filing penalties depend on the return date and payment penalties depend on the payment date.

Practice questions from Penalties for non-compliance

Penalties for Late Filing of Tax Returns in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Penalties for Late Filing of Tax Returns: frequently asked questions

Is there a late filing penalty if no tax is due?

Yes. The £100 fixed penalty applies if the return is late, whatever the tax position. An individual's tax-geared penalty is the greater of 5% of the tax due and £300, so the £300 minimum still applies at six months. A company has no minimum, so a company with no unpaid tax has no tax-geared penalty.

How do late filing penalties differ for companies and individuals?

Individuals face £100, then daily penalties of £10 up to £900, then the greater of 5% of tax due and £300 at six months and again at twelve months. Companies face £100 plus a further £100 at three months. They then face 10% of unpaid tax if more than six months late, and a further 10% only if more than twelve months late.

What is the difference between late filing and late payment penalties?

A late filing penalty is for sending the return after its deadline. Late payment penalties and interest apply when the tax is paid after its due date. They are separate and can both apply to the same taxpayer.

Are the penalty amounts given in the exam tax tables?

No. The ACCA tables give rates for areas such as VAT late payment and standard penalties for errors, but the late filing amounts are not among them. You must learn them.