HMRC Penalties & Appeals 2026/27 — Filing, Payment & Reviews

HMRC runs a strict, escalating penalty regime for late filing and late payment of Self Assessment tax. For the 2026/27 tax year, the online return deadline is 31 January 2028. A late return starts with an immediate £100 penalty; after three months, £10-a-day charges can run for up to 90 days; and at six and twelve months a further £300 or 5% of the tax due, whichever is greater, can apply. Estimate your exposure with the HMRC Penalty Calculator→ and keep every deadline in view with the Self Assessment Deadlines guide.

The good news is that HMRC must consider a reasonable excuse before charging penalties, and every penalty notice carries a right of appeal — first to an HMRC review, then to the independent First-tier Tribunal. Getting the paperwork right and responding within 30 days is usually the difference between a £100 lesson and a four-figure bill.

Late Filing Penalties — The Escalating Scale

The penalties stack, so a return filed eight months late with £10,000 of tax due costs £100 plus £900 in daily charges plus £500 (5% of the tax) — about £1,500 before interest. Separate penalty regimes can apply where HMRC alleges an inaccurate return or deliberate behaviour; do not substitute those rules for the late-filing scale above.

Late Payment Penalties

Payment is due by 31 January 2028 for the 2026/27 tax year. If you pay late, HMRC charges a percentage of the amount still outstanding at each trigger date:

A £10,000 bill left unpaid for a year can therefore attract three 5% penalties, each calculated under the rules for the amount unpaid at the relevant trigger date, plus interest. HMRC interest rates change, so check the current HMRC late-payment interest rates rather than relying on a historical example. Paying as much as you can before each trigger date reduces the unpaid amount on which later charges are based.

Interest on Late Payments

Interest runs from the due date until the date you pay, separately from any penalty. The applicable HMRC rates change over time and can differ between late-payment and repayment interest, so use HMRC's current rates when estimating a balance rather than embedding a historical Bank of England rate in the guide. That is a practical reason to file on time and pay promptly even when you expect a refund.

Reasonable Excuse — When Penalties Are Cancelled

HMRC must cancel a late-filing or late-payment penalty if you had a reasonable excuse for the whole period of the default. Recognised excuses include a serious or life-threatening illness, the recent death of a close relative or partner, an unexpected stay in hospital, a fire or flood destroying records, a failure of HMRC's own online systems, and postal delays that are beyond your control. Financial hardship and reliance on an agent who failed are not excuses — using an accountant does not transfer the responsibility, though exceptional agent illness can count. If the excuse ends, you must file and pay without unreasonable delay afterwards, or the protection is lost.

How to Appeal a Penalty

• Within 30 days of the penalty notice, appeal online or in writing, stating the reason.
• For a direct-tax penalty, appeal to HMRC first; you can ask for a statutory review by an officer who was not involved in the original decision.
• Reviews usually take 45 days; the review officer should contact you if more time is needed.
• If you disagree with the review conclusion, you can usually appeal to the First-tier Tribunal (Tax Chamber) within 30 days of the review result.
• The tribunal can uphold, cancel or reduce the penalty; there is no automatic right to a hearing in person, and most cases are decided on the papers.
• Late appeals are possible if you had a reasonable excuse for appealing late, but never assume it — file the appeal as soon as you see the notice.

Keep copies of everything: the penalty notice, your filing evidence, medical letters, or correspondence about system failures. A well-documented excuse is far more likely to succeed than a bare assertion.

Build an appeal file

Treat the 30-day period as a document deadline, not as the date by which every argument must be perfect. Save the envelope or online message, note the issue date on the notice, and calculate the last day for an appeal. Record when the return was filed, when the payment was attempted, the exact error message or event, when the problem ended and what you did afterwards. HMRC's appeal route asks for the dates and the reason for the reasonable excuse, so a timeline is more useful than a general statement that the taxpayer was busy.

Separate the original default from the appeal delay. A taxpayer may have a reasonable excuse for filing late but no reason for sending the appeal late, or vice versa. Explain both periods if both apply. If the appeal is late, submit it immediately with the reason for missing the appeal deadline and evidence such as medical records, bereavement documents, service-status evidence or HMRC correspondence. Do not assume that an accountant's failure automatically transfers liability: the taxpayer normally remains responsible for the return, although exceptional facts should be explained accurately.

Paying a penalty while appealing can prevent further interest on that penalty, but it does not concede the appeal if HMRC's current guidance says payment is appropriate. If the appeal succeeds, HMRC can repay the amount with interest where there is no other outstanding tax. Check the actual notice and payment instructions because the penalty, underlying tax and any payment-on-account balance are separate amounts.

Payment-on-account and multiple liabilities

The 31 January payment can include the balancing payment for 2026/27 and a first payment on account for 2027/28; the second payment on account is normally due on 31 July 2028. A taxpayer who pays only the balancing amount can still have an unpaid payment-on-account liability and late-payment exposure. Conversely, a filing penalty is not calculated by simply looking at the total bank transfer. Reconcile the Self Assessment statement line by line: balancing payment, payments on account, interest, penalties and any credit carried forward.

If you have more than one tax year or tax type outstanding, paying an amount does not always allocate it in the way you expect. Use the correct reference, check the HMRC statement after payment and contact HMRC if the allocation is wrong. A payment plan, appeal or time-to-pay discussion should be recorded separately from a reasonable-excuse appeal; one does not automatically cancel the other.

Use a calendar reminder for every response, review and payment date, and ask for written confirmation of any agreement. Keep that confirmation with the relevant HMRC statement and notice. Check it against the next statement.

Penalties on Other Returns

The same principle applies beyond Self Assessment, but company tax, VAT, PAYE and Construction Industry Scheme returns each have their own penalty calculations, trigger dates and appeal routes. Do not reuse the Self Assessment amounts or assume that a 30-day process works identically for every tax. Follow the penalty notice and the relevant HMRC guidance for that regime.

Common Penalty Mistakes

• Ignoring the first £100 — the daily penalties begin automatically at three months, whether or not you have received reminders.
• Assuming an agent protects you — the filing deadline is yours, and HMRC holds you responsible for your agent's failure.
• Paying the tax but not filing — late filing penalties apply even if all tax is paid on time.
• Not appealing in writing — a phone call to HMRC is not a formal appeal; the 30-day clock keeps running.
• Missing the payment-on-account dates — 31 January and 31 July instalments are both separately penalised.

Action Plan for the 2026/27 Return

Frequently Asked Questions

Build an appeal evidence pack

Save the penalty notice, filing and payment timestamps, HMRC messages, bank confirmation, tax calculation and a dated explanation of the event that prevented compliance. A reasonable-excuse argument is fact-specific: explain what happened, when it happened, why it prevented filing or payment, when the obstacle ended and what action followed. Keep evidence of corrective steps and of any attempt to contact HMRC. Separate the tax debt, penalty, interest and appeal amounts in the reconciliation so that paying one does not accidentally close or abandon another issue.

Check the notice’s appeal deadline and route before submitting. If requesting a review, preserve the request and HMRC’s response; if escalating to the tribunal, keep the original grounds and supporting documents consistent. Do not invent a reason after the event or rely on a calculator to decide whether HMRC will accept it. The calculator estimates exposure; the notice and evidence control the live case.

Estimate your exposure with the HMRC Penalty Calculator→, then read the Self Assessment Deadlines guide and the Self Assessment Filing Guide to keep your 2026/27 return clean.

Official sources

• GOV.UK: Self Assessment tax returns — penalties
• HMRC: Appeal a Self Assessment penalty for late filing or late payment
• GOV.UK: Disagree with a tax decision or penalty
• GOV.UK: Get a review of a tax or penalty decision
• HMRC: Interest rates for late and early payments