If you missed the 31 January 2026 online filing deadline for your 2024-25 Self Assessment return, HMRC’s penalty system starts the very next day. It stacks quickly — a £100 fixed charge, then daily penalties, then two separate 5%-or-£300 tiers. A return filed 12 months late can hit £1,600 plus a percentage of the tax before any interest. HMRC is legally obliged to cancel or reduce a penalty if you have a reasonable excuse. This guide covers the penalty ladder, what HMRC and tribunals accept as reasonable excuse, and the SA370 appeal process.
The 2024-25 Penalty Ladder
The late-filing regime for 2024-25 returns is unchanged from prior years (Schedule 55 to Finance Act 2009). Penalties apply even if you owe no tax or have already paid the right amount through PAYE.
| How late | Penalty | Date (for 2024-25 online return) |
|---|---|---|
| 1 day | £100 fixed penalty | From 1 February 2026 |
| 3 months | £10 per day for up to 90 days (max £900) | From 1 May 2026 |
| 6 months | 5% of tax due or £300 (whichever is greater) | From 1 August 2026 |
| 12 months | Further 5% of tax due or £300 (whichever is greater), up to 100% in deliberate-concealment cases | From 1 February 2027 |
These tiers stack, so a 2024-25 return still outstanding in February 2027 attracts a combined penalty of £1,600 plus 10% (or £2,200 on a deliberate-concealment basis) of the tax due, in addition to late-payment interest and surcharges on unpaid tax.
Our self-assessment penalty calculator models the exact figure for your filing date and tax liability.
What HMRC Accepts as a Reasonable Excuse
Schedule 55, paragraph 23 says a penalty should be cancelled where the taxpayer has a “reasonable excuse”. HMRC’s Compliance Handbook (CH71500 onward) gives examples. Categories that regularly succeed:
- Bereavement — death of a partner, close relative, or business partner shortly before the deadline (file within a reasonable time — usually within 3 months of the event)
- Serious or life-threatening illness — hospitalisation, surgery, terminal diagnosis, severe mental-health episode during or close to the filing period
- HMRC systems or online service outage preventing submission
- Fire, flood, or theft destroying records
- Postal delays beyond your control (mainly paper returns)
- Software failure with your return package where you made reasonable efforts to fix or switch
Excuses that do not work: finding the online system too complicated, your accountant didn’t file on time (HMRC treats agent failure as your failure), no reminder received, UTR not obtained in time, being abroad or on holiday, or inability to pay the tax.
What Counts as Documented Evidence
Tribunals consistently reward contemporaneous, dated evidence: a death certificate plus executor appointment letter; NHS discharge summary or consultant letters dated in the relevant window; insurance correspondence for fire/flood with incident date; HMRC service-status pages showing outage on filing date; email trails with accountants; crime reference numbers for theft.
Retrospective letters drafted after the penalty, generic “stress” statements without medical backing, or “I think the site was down” claims usually fail at both HMRC review and tribunal.
How to Appeal: Form SA370 and the 30-Day Window
The formal appeal route uses form SA370 (“Appeal against penalties for late filing and late payment”):
- Time limit: 30 days from the date on the penalty notice. Late appeals need a separate reasonable excuse for the lateness
- Routes: online through your HMRC account (fastest), by post using SA370, or by phone
- Include: penalty reference, start/end dates of the excuse, a short written explanation, dated evidence, and the return itself (filed alongside the appeal or committed to a stated filing date)
HMRC typically responds within 45 days. If rejected, you can request a free statutory review by an independent HMRC officer, or go directly to the First-tier Tribunal (Tax), which is free to initiate and heard by judges independent of HMRC.
Case Law — Examples That Succeeded and Failed
Succeeded:
- Perrin v HMRC (2018) — Upper Tribunal laid out the modern four-stage test: identify the facts, decide whether they amount to an excuse objectively, was it reasonable for this taxpayer, did they file without unreasonable delay after the excuse ended
- Kincaid v HMRC — serious mental illness documented by GP letter accepted as reasonable excuse for a 6-month delay
- Hok Ltd v HMRC — daily penalties issued without proper notification held procedurally defective; HMRC tightened its process after
Failed:
- Davis v HMRC — “reliance on accountant” rejected; taxpayer remained responsible
- Salem v HMRC — being abroad for 14 months with no filing arrangements rejected
- Cookson v HMRC — simple misunderstanding of the deadline rejected
The Perrin four-stage test is the most practically useful framework: when drafting an SA370, address each question in order — it mirrors how a tribunal evaluates the appeal.
Worked Tax Due + Penalty Example
Tom is a sole-trader plumber who filed his 2024-25 return on 15 August 2026 (6.5 months late) with a final tax liability of £12,000.
Penalties accrued:
| Date | Penalty | Amount |
|---|---|---|
| 1 Feb 2026 | Fixed | £100 |
| 1 May – 15 Aug 2026 | Daily at £10 (90 days capped) | £900 |
| 1 Aug 2026 | 6-month tier (greater of 5% × £12,000 or £300) | £600 |
| Total late-filing penalty | £1,600 |
On top of that, his £12,000 tax liability attracts late-payment interest from 1 February 2026 and a 5% late-payment surcharge after 30 days (1 March 2026) and again at 6 months. Total realistic exposure before appeal: roughly £1,600 + £1,200 surcharge + interest on £12,000 for ~6.5 months, easily £3,000+.
Tom’s wife died suddenly in February 2026 and he was her sole carer and executor. He has a death certificate and the solicitor’s correspondence appointing him executor. An SA370 citing bereavement, supported by those documents, has a strong chance of cancelling the late-filing penalties in full. The late-payment surcharges and interest are separately appealable on the same reasonable-excuse grounds.
See the self-employment tax calculator to verify the underlying liability and the tax refund estimator if the final figures suggest an overpayment.
Frequently Asked Questions
Do I still have to file the return if I am appealing the penalty?
Yes. Filing the return is separate from appealing the penalty. HMRC will usually not process an appeal until the underlying return is in. File first, appeal second (or at the same time).
Can I appeal a penalty if I owe no tax?
Yes. You can still be penalised for late filing even with a zero-tax return, and you can still appeal those penalties using the same reasonable-excuse grounds. The 5%-or-£300 tiers default to £300 when there is no tax, so they are still worth appealing.
What is the difference between a reasonable excuse and special circumstances?
A reasonable excuse (Sch 55 para 23) cancels a penalty entirely if established. Special circumstances (Sch 55 para 16) let HMRC reduce a penalty where cancellation is not justified. Tribunals rarely rely on special circumstances but will where the excuse is weak but the penalty is disproportionate.
How long does HMRC take to respond to an SA370 appeal?
HMRC’s service standard is 45 calendar days, though complex cases can take longer. If no decision has arrived after 90 days, you can escalate by requesting a statutory review.
Can I appeal to the tribunal directly instead of using HMRC review?
Yes. You have the choice of an internal HMRC review (no cost, handled by a different officer) or a direct appeal to the First-tier Tribunal (also no cost). Most appellants try the internal review first because it is quicker; if refused, the 30-day tribunal clock starts again from the review decision.
Sources
- HMRC: Disagree with a tax decision — appeal a penalty (gov.uk)
- HMRC: Form SA370 Self Assessment appeal against penalties
- HMRC Compliance Handbook CH71500 — Reasonable excuse
- HMRC Self Assessment Manual SAM61240 — Late filing penalties
- Finance Act 2009 Schedule 55 — Penalty for failure to make returns
- Perrin v HMRC [2018] UKUT 156 (TCC) — reasonable excuse four-stage test