HMRC charged taxpayers £325m in fines and interest for late self-assessment tax payments last year

HM Revenue and Customs (HMRC) issued £325 million in fines and interest charges to taxpayers who paid their self-assessment bills late last year, says UHY Hacker Young, the national accounting firm*.

Taxpayers must file their self-assessment tax return and pay the tax due by January 31 or face a £100 penalty and interest at 7.75% on any late paid tax. Further penalties apply if delays continue, including a 5% charge if the tax remains unpaid after 28 February.

At least 600,000 taxpayers failed to pay their self-assessment tax by the January 31 deadline last year, according to UHY Hacker Young.

Neela Chauhan, Partner at UHY Hacker Young, says: “The cost of not paying your self-assessment tax can rise quickly. Initial penalties may be relatively small, but interest and further charges add up and can really start hurting quite quickly.”

UHY Hacker Young says that HMRC is unlikely to ease the pressure on those failing to submit their returns and pay their taxes by January 31, as such large amounts of tax go unpaid each year.

HMRC estimates that £8.7bn of self-assessment tax went unpaid last year, 12.5% of the £69.6bn it expected to collect**. In total, £44bn in business and personal taxes are currently overdue, of which 86% or £37.8bn is now ready for debt collection processes***.

Taxpayers urged to challenge incorrect penalties or arrange instalment payments if unable to pay

UHY Hacker Young says people should challenge the penalties on late payment of tax imposed by HMRC if they believe to be wrong, as many are cancelled or reduced to nil in review.

Neela Chauhan says: “Penalties are applied automatically, so it is worth checking they are correct. Many penalties are overturned when challenged, so it is important to dispute those you believe have been issued in error.”

Those unable to pay their self-assessment bills in full should negotiate a Time to Pay arrangements, which allows them to spread the cost in instalments rather than paying a single lump sum. These agreements are typically easier to secure before penalties build up.

Neela Chauhan says: “Those finding it hard to pay their tax bill on time should set up a payment plan as early as possible. The Government is facing a fiscal black hole, so they should expect HMRC to become even tougher on tax debt collection.

“Seeking professional advice can help those struggling with their tax bills budget more effectively for the year ahead.”

* Penalties and interest charged on late payments of 2023/24 self-assessment tax as of 10 December 2025. The payment deadline was 31 January 2025.

** HMRC Tax Gap statistics for tax year 2023/24.

*** HMRC Annual Report for the tax year 2024/25.