Author: Phillips & Co Accountants, Chester
Date: 26 February, 2026
January 31st has come and gone, and if you didn’t quite manage to submit your Self Assessment tax return on time, take a deep breath—you are far from alone.
According to recent data, while over 11 million returns were successfully filed, roughly one million taxpayers missed the deadline this year. Even with the deadline falling on a Saturday, tens of thousands of people were still frantically clicking “submit” in the final hour before midnight.
Life gets busy, paperwork gets delayed, and sometimes the deadline simply slips by. However, while it is a common mistake, ignoring an overdue tax return is one of the most expensive errors a business owner or sole trader can make. HMRC’s penalty system is entirely automated, and the fines escalate rapidly.
If you are looking for expert Accountants in Chester to rescue your tax situation, here is exactly what you need to know about the late filing penalties, and more importantly, how to fix the problem before it gets worse.
The True Cost of a Late Tax Return
There is a dangerous misconception that if you don’t owe any tax, you don’t have to worry about filing on time. This is strictly untrue. HMRC penalises you for the act of filing late, regardless of your final tax bill.
If your return is outstanding, here is the timeline of automatic penalties you are currently facing:
1 Day Late: An immediate, automatic £100 fixed penalty.
3 Months Late: A daily penalty of £10 kicks in. This runs for up to 90 days, adding a maximum of £900 to your fine.
6 Months Late: You will be hit with a further penalty of £300 or 5% of the tax due (whichever is greater).
12 Months Late: Another £300 or 5% of the tax due is added to the pile.
Late Filing vs. Late Payment: The Double Hit
Filing your paperwork late is only half the battle. If you also owe tax and haven’t paid it, you will be hit with a secondary wave of financial punishments.
Late payment penalties are applied at 30 days, 6 months, and 12 months (each adding a 5% surcharge on the unpaid tax). On top of this, HMRC charges late payment interest which accrues daily. With recent Bank of England base rate adjustments, HMRC’s late payment interest rate hovers around 7.75% to 8%. Every single day you delay, your debt to HMRC grows.
What to Do If You Missed the Deadline
When the fines start arriving in the post, the temptation to bury your head in the sand is strong. Do not ignore them. Take these three steps immediately:
File as soon as possible: The daily penalties do not stop until the return is submitted. Getting the return filed—even if you can’t pay the tax bill immediately—caps the late filing fines.
Pay what you can: To minimise the daily interest accruing on your debt, pay any tax you estimate you owe right away.
Check if you have a “Reasonable Excuse”: If a severe illness, bereavement, or unforeseeable emergency prevented you from filing on time, HMRC may agree to waive the penalties. However, they are incredibly strict about what qualifies (forgetting, tech issues, or waiting on bank statements do not count).
How Your Local Accounting Experts Can Help
Untangling a messy, overdue tax situation can be incredibly stressful, but you don’t have to do it alone. As a leading, trusted firm of Accountants in Chester, we specialise in helping local Cheshire businesses and individuals get back into HMRC’s good books.
When you partner with our local tax advisors, we will:
Rapidly gather your records and calculate your exact tax liability.
Submit your overdue Self Assessment immediately to stop further daily penalties.
Communicate directly with HMRC on your behalf, arranging “Time to Pay” plans if you are struggling with the final bill.
Assess your situation to see if a formal penalty appeal is viable, handling the paperwork for you.
Don’t let procrastination drain your hard-earned money. The sooner you act, the less you will pay to HMRC.
Ready to get this off your desk and out of your mind? Contact Phillips & Co Accountants Chester today.
Keep More, Stress Less
Disclaimer
The information contained in this blog is for general guidance only. It does not constitute professional advice and should not be relied upon as such. Always seek tailored advice from a qualified accountant regarding your specific circumstances.