The phrase “HMRC just issued millions of £100 fines” has been popping up in headlines, and for good reason. If you’re a taxpayer in the UK or have family and friends across the pond, you might want to sit down for this one. Her Majesty’s Revenue and Customs (HMRC) recently slapped more than 1 million taxpayers with an automatic £100 penalty for failing to submit their Self Assessment tax returns on time.
It sounds wild, right? Especially when you learn that many of those fined didn’t actually owe any tax. Yikes. So, how did we get here? What does this mean for everyday people? And more importantly, how can you avoid getting caught in the same trap? Let’s break it all down.
Universal Credit Claimants to Get £288 Payment
| Key Information | Details |
|---|---|
| Total taxpayers affected | Over 1.1 million |
| Fine amount | £100 (initial) + escalating penalties |
| Deadline missed | 31 January 2025 (for 2023–24 tax year) |
| Common issue | Many fined owed no tax |
| Escalating penalties | Up to £1,600+ total per year |
| Appeal timeframe | 30 days from notice |
| Support options | Time to Pay, accounting software, tax advisers |
| Official site | HMRC Self Assessment |
The fact that HMRC just issued millions of £100 fines should serve as a wake-up call for taxpayers across the UK. It highlights a system that can penalize the most vulnerable and uninformed. Whether you’re a seasoned business owner or just picked up a side hustle, make sure you’re aware of your filing obligations. If in doubt, reach out to HMRC or a tax adviser—because in this system, ignorance isn’t just costly, it’s penalized.
What Triggered the Penalties?
The Missed Deadline That Sparked It All
The UK tax authority requires individuals who are self-employed, have complex tax situations, or meet certain thresholds to file an annual Self Assessment tax return. For the 2023–24 tax year, the filing deadline was 31 January 2025.
Unfortunately, over 1.1 million people missed that date. And under HMRC rules, missing the deadline results in an automatic £100 fine, no matter what.
Fun fact (not so fun if you’re fined): Even if you don’t owe a penny in tax, you’re still penalized if a return was due and not filed on time.
Escalating Penalties: It Doesn’t Stop at £100
If you think the flat £100 is the end of it, think again. Here’s how it adds up:
- 3 months late: £10 per day, up to 90 days (£900 max)
- 6 months late: Extra £300 or 5% of tax owed (whichever is higher)
- 12 months late: Another £300 or 5% of tax owed
This means you could end up owing £1,600+ in fines over the course of a year—even if you initially owed zero tax.
Why Are People Being Fined If They Don’t Owe Tax?
Great question. HMRC’s system doesn’t check whether you owe tax before issuing fines. If their records say you should file, and you don’t, BOOM — the penalty hits your inbox.
A recent study by the Tax Policy Associates showed that over 600,000 low-income Brits were fined despite earning below the personal allowance (currently £12,570).
Some taxpayers were fined year after year, racking up thousands in debt for not filing paperwork they didn’t even know they had to submit.
“It’s like being charged for a speeding ticket when your car never left the garage.”
Hidden Triggers: When You Might Not Realize You’re Liable
Sometimes HMRC expects you to file if:
- You switch from full-time employment to part-time freelance
- You cash out investments, including crypto
- You rent out a room on Airbnb
- You receive overseas gifts or inheritance
Who Needs to File a Self Assessment?
To avoid being blindsided, here are common reasons you might need to file a return:
- You’re self-employed or a freelancer
- You earn over £100,000
- You have rental income, foreign income, or dividends
- You claimed child benefit and earned over £50,000
- HMRC specifically requested you file
What You Can Do If You’ve Been Fined
Step 1: Appeal the Fine
If you have a reasonable excuse (e.g., illness, bereavement, system errors), you can appeal.
- Use the HMRC appeal portal
- Appeals must be made within 30 days of receiving the fine
Step 2: File ASAP
Even if you’re late, filing sooner prevents the daily £10 penalty from kicking in.
Step 3: Apply for Time to Pay
If you owe tax and can’t afford to pay, set up a payment plan using HMRC’s Time to Pay.
Step 4: Check If You Needed to File At All
If HMRC mistakenly asked for a return, contact them to close your Self Assessment record.
The Bigger Picture: System Criticism & Reform
Who’s Hit the Hardest?
- Elderly
- Low-income earners
- People with disabilities or mental health issues
- Individuals without internet access
These groups often miss filings unintentionally but face the same harsh penalties as everyone else.
Planned Reforms
HMRC plans to roll out a new penalty regime under Making Tax Digital (MTD) starting April 2026:
- No automatic £100 fine for first-time late filers
- Max penalty capped at £200
But here’s the kicker: it only applies initially to those earning over £50,000.
Real-World Example
Sophie, a part-time yoga instructor, earned £9,000 in 2023. She didn’t realize she needed to file a Self Assessment since she owed no tax. She was fined £100 in February 2025, then accrued another £600 over the next year.
With help from a tax adviser, Sophie appealed and had the fines waived—but many others aren’t so lucky.
New Example: Carlos, a retired builder, received a letter from HMRC asking him to file. He ignored it, thinking it was a mistake. A year later, he owed £1,400 in penalties—more than his state pension for a month.
Eligibility for the £288 Payment
| Status | Qualification Criteria | Example Scenario |
| Single Claimant | Must have been claiming Universal Credit and have a qualifying household circumstance (e.g., have children, a disability, or be a carer). | Sarah is a single mother of two children who receives Universal Credit. She will qualify for the extra payment. |
| Claiming as a Couple | Both partners must be claiming Universal Credit and meet the household criteria. The payment is made to the household. | Mark and Jessica are a couple with a dependent child. They claim Universal Credit together and will receive a single £288 payment for their household. |
| New Claimants | You must have been a Universal Credit claimant on a specific date to be eligible. | A person who applies for Universal Credit after the qualifying date will not be eligible for this particular payment. |
How to Avoid Future Penalties
- Sign up for HMRC email reminders
- Use accounting software (like QuickBooks, FreeAgent, or Xero)
- Keep digital records all year
- File early to avoid the January rush
- Get professional advice if unsure
- Use HMRC’s app to track deadlines and updates
FAQs
Can I get fined even if I don’t owe tax?
Yes. If HMRC says you need to file and you don’t, you’re fined regardless of whether you owe tax.
How do I know if I need to file a return?
Check the HMRC eligibility checker.
What is considered a “reasonable excuse” for late filing?
Examples include serious illness, bereavement, natural disasters, and IT failures.
How much can penalties add up to?
Up to £1,600+ per year, depending on how late you file and whether you owe tax.
When will the new penalty system start?
April 2026 for high earners; lower thresholds TBD.
Can I speak to someone at HMRC for help?
Yes. Call their Self Assessment helpline or use the HMRC webchat service.
