The 31st January Self Assessment deadline has just passed, and if you’re a limited company director, your Corporation Tax deadline looms based on your accounting year end. But what happens if you’re not ready? Can you file late, and more importantly, should you?
Let’s clear up the confusion around late filing and help you decide the best course of action for your business.
Understanding UK Tax Deadlines
First, let’s be clear about what deadlines apply to you:
Self Assessment (Sole Traders and Partnerships):
- Paper returns: 31st October following the end of the tax year
- Online returns: 31st January following the end of the tax year
- Payment deadline: 31st January (with a payment on account due 31st July)
Corporation Tax (Limited Companies):
- Return deadline: 12 months after your accounting period ends
- Payment deadline: 9 months and 1 day after your accounting period ends
Unlike some countries, the UK doesn’t have a formal “extension” system. If you miss these deadlines, you’re simply filing late.
The Cost of Filing Late
HMRC doesn’t offer extensions, and penalties start immediately when you miss the deadline.
Self Assessment penalties:
- 1 day late: £100 fixed penalty
- 3 months late: £10 per day (up to 90 days = £900 additional)
- 6 months late: £300 or 5% of tax due (whichever is higher)
- 12 months late: another £300 or 5% of tax due (whichever is higher)
Corporation Tax penalties:
- Up to 3 months late: £100
- 3 to 6 months late: another £100
- More than 6 months late: penalties based on percentage of unpaid tax
Plus, you’ll face interest charges on any unpaid tax from the payment deadline.
When Filing Late Might Be Your Best Option
Despite the penalties, there are situations where filing late is the practical choice:
1. You’re Missing Critical Documents
If you’re waiting for information you genuinely can’t obtain by the deadline – such as forms from a former employer, details from HMRC about previous years, or records from a defunct bank – filing an incomplete or inaccurate return could cause bigger problems than a late penalty.
Best approach: File as late as possible whilst minimising penalties. Communicate with HMRC about the delay if the amounts involved are significant.
2. Your Records Are Incomplete
If your bookkeeping is seriously behind and you’d need to estimate large portions of your income or expenses, the risk of getting your tax wrong might outweigh the late filing penalty.
Calculate the trade-off: Would the £100 penalty plus professional fees to get your accounts right cost less than potentially underpaying (or overpaying) tax based on guesswork? Often, yes.
3. You’re Facing a Personal Crisis
Serious illness, bereavement, or other personal emergencies can make meeting tax deadlines impossible. HMRC has the power to waive penalties for reasonable excuses.
Important: Contact HMRC as soon as possible to explain your situation. Document everything. “I forgot” or “I was busy” won’t count as reasonable excuses, but genuine emergencies do.
4. Your Business Structure Changed Recently
If you’ve recently converted from sole trader to limited company, or vice versa, working out what you owe can be complex. Getting it right matters more than getting it in on time.
Watch out: This doesn’t eliminate the penalties, but it may be worth paying them to ensure accuracy during a complicated transition year.
When You Should NOT File Late
Don’t File Late If…
You owe tax you can’t afford: Filing late doesn’t delay the payment deadline. Interest accrues from the original payment date regardless of when you file. File on time (even if you can’t pay immediately) and arrange a Time to Pay agreement with HMRC.
You’re getting a refund: Why would you delay receiving money that’s owed to you? Even if your accounts aren’t perfect, file on time if you know you’re due a refund.
You just haven’t got round to it: The £100 penalty is certain, but if you act now, you can avoid the escalating daily penalties that kick in after 3 months. Get your accountant involved immediately.
You’re a limited company near the deadline: Corporation Tax penalties are lower early on, but they escalate significantly. Plus, filing late affects your company’s credit rating and can trigger HMRC investigations.
The Better Alternatives
Instead of filing late, consider these options:
Make a Reasonable Estimate
If you’re missing a few receipts or records, make conservative estimates and file on time. You can always amend your return later if needed (within 12 months of the filing deadline).
Pro tip: Overestimate income and underestimate expenses slightly if you’re unsure. You can claim a refund later, but underpaying leads to interest charges.
Get Emergency Help
Many accountants offer rush services during tax season. Yes, you’ll pay a premium, but it’s often less than the cumulative penalties for filing late.
File Online at the Last Minute
The online system lets you file right up until midnight on the deadline. If you’ve got your figures together late in the day on 31st January, you can still file on time.
Use HMRC’s Basic Tools
If your tax affairs are straightforward, HMRC’s online system walks you through the process. It’s not as sophisticated as accounting software, but it gets the job done.
If You’re Already Late
The penalties have started, so now your goal is damage limitation:
- File as soon as possible to prevent daily penalties from kicking in at 3 months
- Pay what you owe immediately to stop interest accruing
- Explain if you have a reasonable excuse – HMRC may waive penalties
- Don’t ignore it – penalties and interest will keep accumulating
Planning for Next Year
If you’ve struggled to meet this year’s deadline, set yourself up for success next time:
- Keep your bookkeeping current throughout the year (monthly is ideal)
- Set reminder alerts for 3 months before, 1 month before, and 1 week before your deadline
- Work with an accountant who’ll keep you on track
- Consider using accounting software that estimates your tax liability in real time
- If cash flow is tight, save regularly for your tax bill rather than scrambling in January
The Bottom Line
Filing late should be a last resort, not a strategy. The penalties are real, they escalate quickly, and “I didn’t have time” won’t get them waived. In most cases, filing an imperfect return on time is better than filing a perfect return late.
However, if you’re genuinely not ready and filing would mean guessing at significant figures, the early late filing penalty might be worth paying to get your accounts right. Just don’t let “late” turn into “very late” – those escalating penalties add up fast.
Need help deciding what to do? Let’s have a quick conversation about your specific situation and work out the best path forward. Whether that’s a rush filing or strategic late submission, we’ll minimise both your penalties and your stress.
