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    HMRC to reform Self Assessment penalty system

    From 2026, the current standard £100 fine for late filing of Self Assessment tax returns is due to be changed to a points-based system for self-employed individuals and landlords with a turnover above £50,000.

    HMRC have confirmed that the penalty system will be reformed in order to curb the abuse of the Self Assessment system and support taxpayers who genuinely make an occasional mistake.

    The proposed penalty reforms for paying tax late will be based on the length of time the tax is outstanding, meaning the earlier the overdue payment is made, the lower the penalty charge will be.

    The points-based system will be beneficial for those who only occasionally miss deadlines. For example, if an individual misses a self assessment deadline, they will initially be given one point, with a financial penalty only being charged once a set number of points has been reached. This approach recognises that taxpayers who infrequently miss deadlines should be encouraged to comply with filing obligations, rather than immediately being charged a penalty. Instead, the new penalty regime will penalise the minority who persistently miss filing and payment deadlines.

    Although the reforms already apply for VAT, following the government decision in December 2022 to give businesses more time to prepare for Making Tax Digital (MTD) for Income Tax, the changes are now due to come in from April 2026.

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    If you would like to discuss the Self Assessment penalty system changes in more detail, please speak to your usual PM+M adviser or email us at

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