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HM Revenue and Customs (HMRC) issued £325m in fines and interest to taxpayers who paid self-assessment bills late last year, according to UHY Hacker Young.
The firm said that at least 600,000 taxpayers failed to pay their tax by the 31 January deadline.
Those who miss the date face an initial £100 penalty and interest at 7.75%, and further 5% charges apply if the tax remains unpaid after 28 February. HMRC said it estimates £8.7bn of self-assessment tax went unpaid last year, totaling 12.5% of expected collections.
Currently, £44bn in business and personal taxes are overdue, UHY said. HMRC records show 86%, or £37.8bn, of that debt is now ready for formal debt collection processes.
UHY suggested that taxpayers should challenge penalties they believe are incorrect, and noted many automatic fines are cancelled or reduced to nil upon manual review by the tax authority.
Neela Chauhan, a partner at UHY Hacker Young, said: “The cost of not paying your self-assessment tax can rise quickly. Initial penalties may be relatively small, but interest and further charges add up and can really start hurting quite quickly.
“Penalties are applied automatically, so it is worth checking they are correct. Many penalties are overturned when challenged, so it is important to dispute those you believe have been issued in error.”
She added: “Those finding it hard to pay their tax bill on time should set up a payment plan as early as possible. The Government is facing a fiscal black hole, so they should expect HMRC to become even tougher on tax debt collection.”
