Where income tax was due but not paid by the 31 January 2023 self-assessment deadline, late-payment penalties will start to be levied in March. The legislation says that the first ‘penalty date’ is the day after a period of 30 days has expired, starting after the original due date (FA 2009 Sch 56 para 1). This means that the penalty date is 31 days (30 days plus one day) after the original deadline. For online returns due by 31 January 2023, the first penalty will therefore be levied if the tax is paid on 3 March 2023 or later.
For example, an individual files their return online by 31 January and pays £9,000 of the £10,000 they owe in tax, leaving £1,000 unpaid. If the £1,000 is still outstanding on 3 March, they will be liable to a penalty of £50 (5% of £1,000). Further 5% penalties apply based on tax outstanding after six and 12 months.
Daily interest on late-paid tax runs from the due date until the date on which payment is made – currently at HMRC’s 6.5% late-paid interest rate – meaning that interest will apply even if the outstanding tax is paid before the 3 March penalty date.
Where income tax was due but not paid by the 31 January 2023 self-assessment deadline, late-payment penalties will start to be levied in March. The legislation says that the first ‘penalty date’ is the day after a period of 30 days has expired, starting after the original due date (FA 2009 Sch 56 para 1). This means that the penalty date is 31 days (30 days plus one day) after the original deadline. For online returns due by 31 January 2023, the first penalty will therefore be levied if the tax is paid on 3 March 2023 or later.
For example, an individual files their return online by 31 January and pays £9,000 of the £10,000 they owe in tax, leaving £1,000 unpaid. If the £1,000 is still outstanding on 3 March, they will be liable to a penalty of £50 (5% of £1,000). Further 5% penalties apply based on tax outstanding after six and 12 months.
Daily interest on late-paid tax runs from the due date until the date on which payment is made – currently at HMRC’s 6.5% late-paid interest rate – meaning that interest will apply even if the outstanding tax is paid before the 3 March penalty date.
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