Every different form and band of tax see the application of a separate penalty for misconduct, usually in the form of a fine. Failing to pay these fines will often result in criminal proceedings being brought against an individual or business.


The first flat-rate penalty that anybody should be aware of is returning their tax return late. If an individual or business does not file their tax return they are liable for a fine of £100, which may increase if the tardiness extends beyond three months. After these three months, an additional £10 per day will be applied to your fine, capping at £900. Should six months elapse, an additional penalty of £300 or 5% of the tax owed (whichever total is higher) will be applied to the fines above. Should you reach twelve months without filing your tax return, you will face another £300/5% of the total bill, or in some cases, 100%.



Penalties will arise for inaccurate tax reporting – for example, failing to declare and pay certain sums of tax that may be due to HMRC – due to a lack of reasonable care. These fines operate on a sliding scale depending on the severity of the offence and will be detailed below. Sometimes these fines can be contested, but the appeal must be made within 30 days of the fine being issued and the government has very strict criteria on what they consider to be a reasonable excuse.

This is one of many reasons why it is hugely advisable to bring in professional assistance with your tax matters and returns, which will ensure that your tax information is submitted accurately and on-time.

Mistake or Misrepresentation

While tax law is extremely grounded in accuracy and factual data, mistakes can happen. If you can prove to HMRC that any mistake or misrepresentation in your tax

Failure to Take Reasonable Care

If HMRC deem an individual or business to have failed to take reasonable care in completing their tax return, it will be declared a moderate offence.

Deliberate Understatement

Deliberate understatement on a tax return is a serious offense and is considered to be a wilful act of fraud. At best, the penalty can be up to 70% of the extra tax due

Deliberate Concealment

Deliberate concealment is an attempt to tricking HMRC, and as a result, the consequences are extremely severe and the penalty can be as high as 300%.