What tax penalties apply for late filing Capital Gains Tax (CGT) returns or payment of tax? There are special tax filing and obligations in respect of reporting capital gains made on the disposal of different types of asset.

This is a freeview 'At a glance' guide.

Tax penalties: at a glance

Return Filing deadline Lateness Penalty  More detail

Capital Gains Tax online property return for residential property disposals (from April 2020)

Non-Resident CGT Returns 

Deadlines: after disposal date:

  • 60 days if the completion date was on or after 27 October 2021
  • 30 days if the completion date was between 6 April 2020 and 26 October 2021

 

Miss filing deadline  Fixed penalty: £100 per return  

See Tax penalties: Late filing

 

A new points-based regime will apply from April 2023. See Penalties: points based late submission regime

 

3 months late Daily penalty £10 per day for up to 90 days (max £900)
6 months late 5% of tax due or £300, if greater*
12 months late 5% or £300 if greater*, unless the taxpayer is held to be deliberately withholding information that would enable HMRC to assess the tax due.
12 months & taxpayer deliberately withholds information 

Penalty is based on behaviour:

  • deliberate and concealed withholding 100% of tax due, or £300 if greater.
  • deliberate but not concealed 70% of tax due, or £300 if greater.

Reductions apply for prompted and unprompted disclosures and telling, giving and helping.

 

Self Assessment & Capital Gains Tax (CGT) returns.

Annual tax returns, long or short plus supplementary pages.

Filing deadlines: following the end of the year of assessment: 

  • On paper: 31 October.
  • Electronically: 31 January.
As Above As Above
Late payment of CGT: Residential 60 day return 30 days late 5% of tax due See Penalties: Late Payment (Subscriber guide)
6 months late 5% of tax outstanding 
12 months late 5% of tax outstanding 
Self Assessment return 30 days late 5% of tax due
6 months late 5% of tax outstanding 
12 months late 5% of tax outstanding 

 

Filing obligations and deadlines: at a glance

Capital Gains made on UK residential property disposals, including gains made by Non-Resident taxpayers of indirect disposals of interests in a 'UK property rich' entity must be declared on HMRC's online CGT disposal return, and the tax paid, using the Capital Gains Tax UK property disposal service, within:

  • 60 days if the completion date was on or after 27 October 2021.
  • 30 days if the completion date was between 6 April 2020 and 26 October 2021

Other Capital Gains and also reportable residential property gains are both reported under Self Assessment on or before 31 January following the year of assessment.

This means that there may well be up to two filing obligations and two tax payments, where a balancing payment is due under Self Assessment

See Reporting Capital Gains

 

Further penalties

Offence Penalty  More detail
Error or mistake in return

A tax geared penalty 0% to 100% based on behaviour and cooperation.

From 1 April 2017: Potential asset-based penalty if an error is deliberate and offshore and potential lost revenue is £25,000 or more.

Maximum penalties are increased by 50% or 100% if the error relates to a country that has been grey or blacklisted.

See Tax penalties: Errors in returns and document

See Penalties: Offshore Income, CGT and IHT

Failure to notify chargeability to tax 30% to 100% of lost revenue, depending on behaviour See Tax penalties: Failure to notify
Failure to correct errors

For correction of errors with an offshore element occurring on or before 5 April 2017. The deadline is 30 September 2018.

If corrected on time, penalties as actual failure above. Failure to correct penalties start at 200% of the offshore potential lost revenue and cannot be less than 100%. No mitigation for severity.

See Offshore Evasion: Requirement to correct

See Penalties: Offshore Income, CGT and IHT

     

 

Late payment: Time to pay agreements

If the taxpayer makes a Time to pay agreement with HMRC the penalty is suspended.

  • The taxpayer will become liable to the penalty if the suspension agreement is broken.

Appeal

  • The taxpayer has 30 days to lodge an appeal with HMRC against a tax penalty. This was extended by three months for COVID-19 related delays for the 2019-20 tax year.
  • Late appeal may be accepted at the discretion of HMRC or the tribunal judge.

The legislation relevant to each type of penalty provides for the appeal process and it is advisable first off to ensure that any penalty charged has been made correctly according to the legislation.

HMRC will not challenge any late filing penalty appeal provided that there is a Reasonable excuse for late filing and that an appeal has been made.

Appealing a penalty can be far from straightforward as there are numerous grounds for appeal and technical arguments that can assist the taxpayer.

Special reduction

  • Upon appeal, HMRC has a statutory requirement to consider whether any special circumstances exist and if so it may override the statutory penalties and reduce them as it sees fit. See Appeals: Grounds for Appeal Toolkit

Further information

See Tax Adviser's Guide to Tax Penalties


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