The UK’s HM Revenue and Customs (HMRC) collected £325 million in fines and interest from taxpayers who paid their self-assessment bills at the end of last year, according to accountancy practice UHY Hacker Young.

Individuals who complete the self-assessment must submit their return and pay the taxes they owe before January 31.

Failure to meet the deadline results in a £100 fine plus 7.75% interest on the unpaid tax. An additional 5% penalty applies if the tax is not paid after February 28.

UHY Hacker Young estimates that at least 600,000 taxpayers failed to pay self-assessment tax by the January 31, 2025 deadline.

The company said it does not expect HMRC to soften its approach to late filing and payment, given the recurring scale of unpaid self-assessment liabilities.

Neela Chauhan, partner at UHY Hacker Young, said: “The cost of not paying self-assessment tax can add up quickly. The initial penalties may be relatively small, but the interest and additional charges add up and can start to hurt quite quickly.”

HMRC figures show that £8.7bn of self-assessment tax was not paid last year, representing 12.5% ​​of the £69.6bn it expected to collect.

In terms of business and personal taxes, a total of £44 billion is currently overdue, with £37.8 billion classified as ready to enter debt collection proceedings.

UHY Hacker Young encourages taxpayers to review late payment penalties they receive and challenge them if they believe they have been incorrectly applied.

Mr Chauhan added: “Sanctions are applied automatically, so it’s worth checking they’re correct. Many sanctions are overturned on appeal, so it’s important to discuss those you think have been issued in error.”

For those unable to pay their self-assessment bill in full, the company highlights HMRC’s payment time arrangements, which allow taxpayers to spread payments in installments rather than paying in one lump sum.

These settlements are generally easier to secure before additional penalties and interest accrue.

“HMRC levies £325m in penalties for self-assessment late payments” was originally created and published by The Accountanta trademark owned by GlobalData.

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