Late Tax Return Penalty: UK, US, Australia and Canada Compared

A late tax return penalty is the charge a tax authority adds when your return arrives after the deadline. It's separate from paying late, and in most countries you can be hit by both. Below is the UK ladder first, because it's the one that catches the most people out, then the US, Australian and Canadian rules, and a table that puts all four side by side.

The UK penalty ladder for a late Self Assessment return

HMRC's penalties for a late return stack on top of each other. Each stage is added to the last one, it doesn't replace it:

1. The day after the deadline: an initial £100 penalty.
2. After 3 months: daily penalties of £10 per day, up to a maximum of £900.
3. After 6 months: a further penalty of 5% of the tax due or £300, whichever is greater.
4. After 12 months: another 5% or £300, whichever is greater.

Here's the detail people miss. Because the 6 and 12 month penalties are 'whichever is greater', a return that's a year late still collects the £100, the daily penalties and two £300 charges even if your tax bill is nothing at all. If you're not sure you even need to file, check whether you have to do a Self Assessment return before the deadline passes, not after.

Paying late in the UK: penalties plus interest

Paying late is a separate problem. GOV.UK says you'll get penalties of 5% of the tax unpaid at 30 days, 6 months and 12 months, and you'll also be charged interest on the amount owed. HMRC sets late payment interest at the Bank of England base rate plus 4% (from 6 April 2025), and its published rate was 7.75% from 9 January 2026 when we checked in October 2026. Penalties themselves must be paid within 30 days of the date on the penalty notice.

If you registered for Self Assessment after 5 October and didn't pay your bill by 31 January, there's also a separate 'failure to notify' penalty based on the amount still unpaid. The key dates are set out in this guide to the Self Assessment deadline, and the return itself is covered in the SA100 guide.

Reasonable excuse: when HMRC will cancel a penalty

You can appeal a Self Assessment penalty if you have a reasonable excuse. You usually have 30 days from the date the penalty was issued to contact HMRC or appeal. GOV.UK lists examples that may count, including the death of a partner or close relative shortly before the deadline, an unexpected stay in hospital, a serious illness, a computer or software failure while you were preparing the return, HMRC online service problems, fire, flood or theft, unpredictable postal delays, and relying on someone else who didn't send your return.

It's just as clear about what won't work: a payment that failed because you didn't have enough funds, finding the HMRC system too hard to use, not getting a reminder from HMRC, or making a mistake on your return. Whatever the excuse, you must file or pay as soon as you're able to. If HMRC doesn't change its decision, you'll be offered a review, and you can take the appeal to the tax tribunal.

United States: failure to file and failure to pay

The IRS charges a failure to file penalty of 5% of the unpaid tax for each month or part month the return is late, up to a maximum of 25%. If the return is more than 60 days late, a minimum penalty applies: for returns due after 31 December 2025, it's $525 or 100% of the unpaid tax, whichever is less, as of October 2026.

The failure to pay penalty is 0.5% of the unpaid tax per month, also capped at 25%. When both apply in the same month, the filing penalty is reduced by the payment one, so you'd pay 4.5% plus 0.5% rather than 5% plus 0.5%. If you filed on time and have an approved payment plan, the failure to pay rate drops to 0.25% a month, and it rises to 1% a month if you don't pay within 10 days of a notice of intent to levy. The IRS waives the filing penalty if you can show reasonable cause.

Australia: the failure to lodge penalty

The ATO works in penalty units, not percentages. The base failure to lodge penalty is one penalty unit for every 28 days (or part of 28 days) the document is overdue, up to a maximum of 5 penalty units. For infringements on or after 1 July 2026, one penalty unit is $364, as of October 2026. The base amount is multiplied by 2 for a medium withholder and by 5 for a large withholder.

The good news for individuals: the ATO says it generally doesn't apply penalties in isolated cases of late lodgment, it warns you by phone or in writing first, and it generally won't issue a penalty notice for a late return that results in a refund or a nil result. You can ask for remission, but being on holiday, busy with work or not getting a reminder are listed as reasons it would likely decline.

Canada: the late-filing penalty

The CRA only charges a late-filing penalty when you have a balance owing. It's 5% of the balance owing, plus 1% for each full month the return is late, up to 12 months. If the CRA charged you a late-filing penalty for 2022, 2023 or 2024 and issued a demand to file, the repeat penalty is 10% of the balance owing plus 2% for each full month late, up to 20 months. Interest is charged on top, compounded daily from the day after the due date.

Late filing penalties compared

Country	Penalty for filing late	Is it tied to tax owed?	Relief
UK (HMRC)	£100, then £10 a day after 3 months up to £900, then 5% or £300 at 6 and 12 months	No, the £100 and minimums apply even with nothing owed	Reasonable excuse appeal within 30 days
US (IRS)	5% of unpaid tax per month, up to 25%; minimum after 60 days	Yes	Reasonable cause
Australia (ATO)	1 penalty unit per 28 days, up to 5 units	No, it's time based	Remission request; usually no penalty for refund or nil returns
Canada (CRA)	5% of balance owing plus 1% a month, up to 12 months	Yes	Request to cancel or waive

For the Canadian rules in detail, our Canadian tax return guide explains the return itself and its due dates.

What I'd do if a return is already late

My advice: file first, argue second. In every one of these four systems the clock keeps running until the return is in, and in the UK the daily penalties start at the 3 month mark whether you owe anything or not. If you can't pay the whole bill, filing on time still stops the late-filing penalties, and you can deal with the payment side separately. If something serious stopped you, gather the dates and evidence and appeal straight away. And if you run a limited company in the UK, remember the company return has its own penalty regime, explained in this CT600 guide. For a decision about your own position, speak to the tax authority or a qualified accountant.

Frequently asked questions

How much is the penalty for a late tax return in the UK?

HMRC charges an initial £100 penalty the day after the deadline, then £10 a day after 3 months up to £900, then 5% of the tax due or £300, whichever is greater, at 6 months and again at 12 months.

Do I get a penalty if I owe no tax?

In the UK, yes, because the £100 penalty and the £300 minimums apply even when no tax is due. In Canada the late-filing penalty only applies when there's a balance owing, and the ATO generally doesn't issue a penalty notice for a late return that results in a refund or a nil result.

Can I appeal a late filing penalty?

Yes, if you have a reasonable excuse such as a serious illness, a bereavement or an HMRC system problem. You usually have 30 days from the date of the penalty to appeal, and you must file as soon as you're able to.

Is not getting a reminder a reasonable excuse?

No. GOV.UK lists not getting a reminder from HMRC as something that won't be accepted, and the ATO also lists not receiving a reminder as a reason it would likely decline a remission request.

What is the IRS penalty for filing late?

The IRS failure to file penalty is 5% of the unpaid tax for each month or part month the return is late, up to 25%, with a minimum penalty if the return is more than 60 days late.