HMRC set to reform self assessment penalty system

The current standard £100 fine for late filing of self assessment tax returns is set to be changed to a points- based system from 2026.

HMRC have backed the change up to reduce the abuse of the self assessment system and to support those taxpayers who make occasional mistakes.

Taxpayers who miss a filing deadline will be give one point with a financial penalty being charged when only a set number of points is reached.

The above approach recognises that taxpayers who occasionally miss a deadline should be encouraged to comply with filing obligations, rather than being immediately charged a penalty. There will be further changes to the penalties that relate to non payment of tax, meaning the earlier an overdue tax payment is made, the lower the penalty charge will be.

For example, a payment made within 30 days will have a lower penalty charge then one made after 30 days. This is set to encourage those that can pay to do so, while taking appropriate action against persistent non-compliance.

The new penalty regime will penalise the minority who persistently do not comply by missing filing and payment deadlines, while being more lenient on those who make the occasional slip-up.

For more information on the above contact our office on 0330 2233660 to chat to a member of our expert team, and as always we will be happy to help.