The cost of missing your SAT return deadline

HMRC says that more than 10.2million of an expected 12.2million people did manage to submit their returns on time. For those who were late, the £100 penalty for a late tax return was waived during February this year, but the usual penalties were payable from 1 March. The first additional charge for people who were late paying the tax they owed, usually due at the beginning of March, was also postponed until 1 April, allowing people to set up a Time to Pay arrangement. 

 

There are some costly reasons why you won’t want to join people who are late submitting their tax returns in 2023. There are unlikely to be any postponements, and here’s what will happen if your tax return and payments for the 2021/22 tax year are late. 

 

Even if you don’t owe any tax, you will normally be fined on 1 February if you don't have a valid reason for a late submission, and further penalties will follow. 

 

 

When you submit your tax return the penalties will stop. However, there are also additional fines if your tax payments, also due on 31 January, are late. 

 

If you don’t pay your tax bill on time, including your payments on account for the coming year due on 31 January and 31 July, you will also be penalised unless you're paying through PAYE. 

 

If you are 30 days late paying your tax bill, you will be charged an additional 5.5% of the tax you owe at that date, and a further 5.5% of the tax you owe at six months and 12 months. 

 

These charges are separate and in addition to any charges for a late tax return. 

 

You can calculate your potential penalties using the gov.uk calculator. 

 

Plans for self-assessment tax payers with business or property income over £10,000 per year to follow the government’s new rules for Making Tax Digital (MTD) for Income Tax Self Assessment (ITSA) have been postponed. 

 

They were due to begin in the tax year beginning 6 April 2024, followed by other self-assessment tax payers from 6 April 2025. HMRC now says “The dates for helping HMRC test and develop Making Tax Digital for Income Tax have been extended to 6 April 2026”. 

 

When they come in to effect, the new arrangements will mean that late VAT or self-assessment tax returns will lead to penalty points before a financial penalty must be paid. You will receive a point each time you miss a submission deadline and when you reach a threshold, a penalty of £200 will be charged. Once the threshold has been reached, a penalty will be charged for each subsequent point, but the points total won’t increase. 

 

The penalty thresholds will be: 

Points will remain for two years and will then be removed from your record unless the threshold has been reached. To reduce your points to zero you will have to submit your returns and make your payments on time for a set compliance period of 12 months, for example. 

 

The late payment penalties will be: 

To avoid further penalties, you will need to make a Time to Pay arrangement with HMRC.