Why CIS subcontractors overpay tax, how to work out your refund, and how to get it back faster. Worked example, expenses list and realistic timescales.
Self Assessment Deadlines and Late Filing Penalties
October 14, 2026
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Self Assessment Deadlines and Late Filing Penalties
Quick Summary: Almost everyone knows the 31 January date and almost nobody knows what missing it actually costs, which is why penalties escalate quietly for months before anyone acts. This guide covers only the dates and the money: every deadline in the 2025/26 cycle including the 30 December option most people have never heard of, the two entirely separate penalty ladders that run simultaneously for filing late and paying late, the interest charged on top of both at a rate that changed in 2025, what a return filed twelve months late costs in cash on a £5,000 bill, the new quarterly deadlines that now apply to sole traders and landlords inside Making Tax Digital, and how Time to Pay stops the payment penalties if you act before the right date.
Why the Penalty That Hurts Is Not the One People Worry About
The £100 fine is the one everybody names. It is also the smallest number in this guide by a wide margin.
The reason penalties get expensive is that filing late and paying late are separate failures with separate penalty ladders, and both run at the same time, with interest accruing on top of both. A taxpayer who misses 31 January and does nothing for a year does not face one penalty. They face four filing penalties, three payment penalties and twelve months of daily interest.
There is a second reason the £100 is misleading. It applies even when you owe nothing. A sole trader who made a loss, a landlord whose property ran at a deficit, a director whose tax was fully covered by PAYE, all of them are charged £100 the day after the deadline if a return was due and did not arrive. The penalty is triggered by the missing return, not by the tax.
Understanding which ladder you are on, and which rung is coming next, is the difference between a manageable problem and one that doubles a tax bill.
Every Deadline for the 2025/26 Tax Year
The 2025/26 tax year ran from 6 April 2025 to 5 April 2026. These are the dates that follow it.
| Date | What is due |
| 5 October 2026 | Register for Self Assessment if this is your first return |
| 31 October 2026 | Paper tax returns must reach HMRC |
| 30 December 2026 | File online and ask HMRC to collect tax under £3,000 through your 2027/28 PAYE code |
| 31 January 2027 | Online return deadline, balancing payment for 2025/26, and first payment on account for 2026/27 |
| 31 July 2027 | Second payment on account for 2026/27 |
Two points worth fixing in your head.
You cannot rescue a late paper return by filing online. HMRC takes the date of the first return it receives for penalty purposes. A paper return submitted on 5 November 2026 is late, and re-filing the same return online in January does not undo it.
Payments on account catch people out in their second year. If your 2025/26 bill exceeds £1,000 and less than 80% of your tax was collected at source, you pay the balancing amount for 2025/26 plus the first instalment towards 2026/27 on the same day. For a first-time filer, that January bill is often around 150% of what they expected.
The 30 December Deadline Almost Nobody Uses
This one is worth knowing about because it solves a real problem and costs nothing.
If you owe less than £3,000 and you file your return online by 30 December 2026, you can ask HMRC to collect the tax through your PAYE code across the 2027/28 tax year instead of demanding it in one payment on 31 January.
The tax gets spread across twelve months of payslips rather than landing as a lump sum in the worst month of the year. You need PAYE income for it to work, which makes it useful for directors taking a small salary, employed people with rental income, and anyone with a side business alongside a job.
Note the date carefully. It is 30 December, not 31 December, and missing it by a day removes the option entirely.
Late Filing Penalties
These are charged under Schedule 55 of the Finance Act 2009 and apply automatically, whether or not you owe any tax.
| How late | Penalty | Running total |
| 1 day | £100 fixed | £100 |
| 3 months | £10 per day for up to 90 days | Up to £1,000 |
| 6 months | The greater of £300 or 5% of the tax due | Up to £1,300+ |
| 12 months | A further £300 or 5%, whichever is greater | Up to £1,600+ |
Where HMRC finds the failure was deliberate and concealed, the 12-month charge can rise to as much as 100% of the tax due.
There is no tolerance period and no discretion built into the system. The £100 is applied automatically on 1 February.
Late Payment Penalties Are a Separate Ladder
Filing on time does not protect you if the money does not arrive. These penalties are charged under Schedule 56 and run independently of the filing penalties above.
| How late the payment is | Penalty |
| 30 days | 5% of the tax still unpaid |
| 6 months | A further 5% of the tax still unpaid |
| 12 months | A further 5% of the tax still unpaid |
You can be charged on both ladders at once. You can also be charged on one and not the other: file on time and pay late, and you get the payment penalties but no filing penalty. Do the reverse and you get the £100 but no payment charge.
Interest Runs on Top of Everything
Interest is not a penalty and is not subject to appeal on the grounds of reasonable excuse. It is charged automatically as simple daily interest on any unpaid tax from the day after the due date until the balance clears.
The rate is set at the Bank of England base rate plus 4 percentage points. That formula changed on 6 April 2025, when it rose from base rate plus 2.5%.
At the time of writing the late payment rate is 7.75%, effective from 9 January 2026, with repayment interest on money HMRC owes you at 2.75%. Because the rate moves whenever the base rate does, check the current figure on GOV.UK before relying on it.
Interest on late tax is not deductible against your profits, so there is no partial relief on it.
What Twelve Months Late Actually Costs
Take a straightforward case: a 2025/26 tax bill of £5,000, with the return filed and the tax paid exactly twelve months late.
| Charge | Amount |
| Filing: £100 fixed penalty | £100 |
| Filing: daily penalties, £10 × 90 days | £900 |
| Filing: 6 months (greater of £300 or 5%) | £300 |
| Filing: 12 months (greater of £300 or 5%) | £300 |
| Payment: 5% at 30 days | £250 |
| Payment: 5% at 6 months | £250 |
| Payment: 5% at 12 months | £250 |
| Interest at 7.75% for a year | Approximately £388 |
| Total on top of the £5,000 | Approximately £2,738 |
That is roughly 55% added to the original liability, and none of it buys anything. The single largest component is the £900 of daily penalties, which accrue between months three and six, the window in which most people are still telling themselves they will deal with it soon.
If You Are Inside Making Tax Digital
Making Tax Digital for Income Tax began on 6 April 2026 for sole traders and landlords whose qualifying income exceeded £50,000, based on the figures in their 2024/25 return. Qualifying income is gross self-employment and property income combined, before expenses. The threshold falls to £30,000 from April 2027 and £20,000 from April 2028.
If that applies to you, the annual cycle is no longer the only set of deadlines you have.
| Quarter | Update due by |
| 6 April to 5 July | 7 August |
| 6 April to 5 October | 7 November |
| 6 April to 5 January | 7 February |
| 6 April to 5 April | 7 May |
A final declaration follows at the end of the year, and the usual Self Assessment filing and payment deadlines continue to apply alongside all of this.
The penalty system is different too. Missed quarterly updates attract penalty points rather than immediate fines. One point per missed deadline, and a £200 penalty once you reach four points if you were mandated into the regime. Points drop off automatically 24 months after the missed deadline provided you stay below the threshold.
There is a soft landing for the first year. HMRC has confirmed that no penalty points will be issued for late quarterly updates during 2026/27. Late payment penalties still apply in full, and you must submit every outstanding quarterly update before you can complete your end-of-year return, so a missed update still blocks you, it just does not cost points this year.
One further point that is live right now: from September 2026, HMRC began signing up people who should already be using Making Tax Digital but had not registered themselves. If your 2024/25 qualifying income was above £50,000 and you have heard nothing, check your position rather than assuming you are outside it.
If You Cannot Pay: Time to Pay
Missing the payment deadline because the money is not there is a different problem from missing it through disorganisation, and HMRC treats it differently if you engage.
A Time to Pay arrangement spreads the debt over installments. You can set one up online without speaking to anyone for Self Assessment debt up to £30,000, spread over up to 12 months, provided your returns are up to date and you apply within 60 days of the payment deadline. Larger debts need a phone call.
The timing point is the one that matters. A Time to Pay arrangement can stop further late payment penalties, but only if it is in place before the relevant penalty date. Setting one up on day 35 does not remove the 5% charged at day 30.
Interest continues to run throughout an arrangement. It reduces the damage rather than eliminating it, but the difference between engaging early and not engaging at all is measured in hundreds of pounds.
Appealing a Penalty
Penalties can be appealed where you have a reasonable excuse, broadly, something unexpected and outside your control that stopped you meeting the obligation, where you put it right as soon as you reasonably could.
HMRC generally accepts serious illness, a bereavement close to the deadline, a service failure in HMRC’s own systems, a fire or flood destroying records, and postal delays outside your control. It generally does not accept pressure of work, finding the return too difficult, not receiving a reminder, or an agent failing to act.
Appeals are usually made within 30 days of the penalty notice. Interest is not appealable on this basis, because it is compensation for late payment rather than a sanction.
Mistakes That Turn a Small Problem into an Expensive One
- Assuming no tax owed means no penalty. The £100 applies regardless.
- Waiting until you have the money before filing. The two ladders are separate. File the return even if you cannot pay, and you avoid the entire filing penalty series.
- Letting the three-month mark pass. Daily penalties are the largest single component and they start at three months.
- Filing a late paper return and then filing online. HMRC uses the first return received. It does not reset.
- Forgetting the payment on account. Budgeting only for the balancing payment leaves a significant shortfall on 31 January.
- Missing 30 December for PAYE coding. A day’s delay removes the option to spread a bill under £3,000.
- Arranging Time to Pay after the penalty date. It stops future charges, not ones already triggered.
- Assuming Making Tax Digital has not reached you. HMRC began enrolling people itself from September 2026.
Putting It Into Practice: A Quick Checklist
- Confirmed whether you need to file for 2025/26 and registered by 5 October 2026 if this is your first return
- Diarised 31 January 2027 for both the return and the payment
- Checked whether you owe under £3,000 and could use the 30 December 2026 PAYE coding option
- Worked out whether payments on account apply and budgeted for the combined January figure
- Filed the return even if the tax cannot be paid yet
- Set up Time to Pay before the 30-day penalty date if the money is not available
- Checked whether Making Tax Digital applies to you based on 2024/25 qualifying income
- Diarised the quarterly update dates of 7 August, 7 November, 7 February and 7 May if it does
- Checked the current HMRC late payment interest rate on GOV.UK rather than assuming
- Gathered figures well before Christmas rather than in the last week of January
Key Takeaways
- The online filing and payment deadline for 2025/26 is 31 January 2027; paper returns were due by 31 October 2026.
- The £100 late filing penalty is automatic from 1 February and applies even where no tax is owed.
- Filing penalties escalate to £10 a day from three months, then the greater of £300 or 5% at six and twelve months.
- Late payment penalties are a separate ladder at 5% of unpaid tax at 30 days, six months and twelve months.
- Interest is charged on top of both at the Bank of England base rate plus 4 percentage points, currently 7.75%, and cannot be appealed on reasonable excuse grounds.
- A £5,000 bill filed and paid twelve months late attracts roughly £2,738 in penalties and interest.
- Sole traders and landlords inside Making Tax Digital have four additional quarterly deadlines, with a points-based penalty system and no points charged for late quarterly updates during 2026/27.
Frequently Asked Questions
- What is the Self Assessment deadline for the 2025/26 tax year?
Midnight on 31 January 2027 for online returns. That is also the date any tax owed for 2025/26 must be paid, and the date the first payment on account for 2026/27 falls due. Paper returns were due by 31 October 2026.
- What is the penalty for filing a tax return late?
£100 immediately, even if you owe nothing. From three months late, £10 a day for up to 90 days, adding a maximum of £900. At six months and again at twelve months, a further charge of the greater of £300 or 5% of the tax due.
- I filed on time but cannot pay. What happens?
You avoid the filing penalties entirely, but late payment penalties apply: 5% of the unpaid tax at 30 days, a further 5% at six months and another 5% at twelve months, plus daily interest. Filing on time and paying late is always better than the reverse.
- Do I still get a penalty if I owe no tax?
Yes. The £100 fixed penalty is triggered by the missing return, not by the liability. If HMRC issued you a notice to file, the return is due regardless of the outcome.
- How much interest does HMRC charge on late tax?
The rate is the Bank of England base rate plus 4 percentage points, a formula that took effect on 6 April 2025. It stood at 7.75% from 9 January 2026. It is charged as simple daily interest and moves whenever the base rate moves, so check GOV.UK for the current figure.
- Can I spread my tax bill?
Yes. A Time to Pay arrangement can be set up online for Self Assessment debt up to £30,000 over up to 12 months, provided your returns are up to date and you apply within 60 days of the payment deadline. Set it up before the 30-day penalty date, because it stops future penalties rather than removing ones already charged.
- Can I appeal a late filing penalty?
Yes, where you have a reasonable excuse, something unexpected and outside your control that prevented you filing, put right as soon as reasonably possible. Serious illness, bereavement and HMRC system failures are generally accepted; pressure of work and not receiving a reminder are generally not. Interest cannot be appealed on these grounds.
Conclusion
The cost of missing 31 January is not £100. On a £5,000 bill, a year of inaction adds close to £2,738 across two penalty ladders and twelve months of interest, and the largest single slice of that accrues between months three and six while most people are still intending to sort it out.
Two decisions prevent nearly all of it. File the return even when you cannot pay the tax, because that removes the entire filing penalty series at a stroke. And if the money is not there, set up Time to Pay before the thirty-day mark rather than after it.
At Aksons Accounting we prepare and file Self Assessment returns for sole traders, landlords and directors, and we get the figures well before the January rush rather than during it. If you are already late, or you are looking at a January bill you know you cannot meet, get in touch now, the options are considerably better before the next penalty date than after it.
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