Gone past 5 October without registering? Act now. The situation gets better the sooner you deal with it and worse the longer it sits, because HMRC treats someone who comes forward on their own very differently from someone they have to chase.
The deadline you missed
You are meant to register for Self Assessment by 5 October following the end of the tax year you started trading. Miss it and you have a "failure to notify". That is the specific thing HMRC can penalise, separate from any late return or late payment.
How the penalty is worked out
The penalty is a percentage of the potential lost revenue, which is basically the tax you should have paid by the normal deadline and did not.
The percentage depends on two things: whether HMRC thinks the failure was careless or deliberate, and whether you told them before or after they came knocking.
- Not deliberate, you disclose it yourself, within 12 months of the tax being due: the range runs from 0% to 30%, and in practice a full, cooperative disclosure is often settled at 0%.
- Not deliberate, you disclose it yourself, more than 12 months late: minimum 10%.
- Not deliberate, but HMRC contacted you first: minimum 10%, or 20% if it is more than 12 months.
- Deliberate: 20% to 70%. Deliberate and hidden: up to 100%.
For most people who simply did not realise they had to register, this is a careless, unprompted disclosure, and the penalty is small or nil.
Reasonable excuse
If something genuinely outside your control stopped you registering on time, and you sorted it out promptly once that thing passed, HMRC should not charge a failure to notify penalty at all for a non-deliberate case. Serious illness, a bereavement, a fire or flood, or an HMRC error can count. Not knowing the rule, or finding the process confusing, generally does not.
The other bills that can stack on top
Registering late often means the return and the payment are late too, and those carry their own charges:
- A late return is £100 the moment it is a day late, then £10 a day after three months up to £900, then more at six and twelve months.
- Late tax gets interest from the original due date, plus a 5% surcharge at 30 days late, another 5% at six months, and another at twelve months.
This is why the order matters: register, get your UTR, file the outstanding return, and pay as soon as you can. Every week you shave off reduces the interest and the risk of the next surcharge landing.
What to actually do now
- Register for Self Assessment today. Use the first-time route unless you have had a UTR before.
- Wait for the UTR to arrive by post, usually about ten working days.
- Work out each outstanding year's income and expenses. If you owe for more than one year, you file a separate return for each.
- File, and pay what you can. If you cannot pay it all at once, set up a Time to Pay arrangement with HMRC rather than ignoring the bill.
- When you file or when HMRC opens a check, be clear that you are disclosing this voluntarily. It affects which end of the penalty range you land on.
Do not sit on it waiting until you feel prepared. A late registration with the tax paid and an honest explanation is a manageable problem. Silence is the version that turns into a real one.