Discovering that a tax registration or notification deadline has been missed can be worrying. Delaying further may increase interest, penalties and the time needed to resolve the position.
The right response depends on the tax involved, when the obligation arose and why HMRC was not notified. Acting promptly, checking the figures and providing complete information can help bring the matter under control.
When can a failure to notify arise?
A failure can arise where a person or business does not tell HMRC about a tax obligation within the applicable time limit.
Examples may include:
- a business becoming liable to register for VAT;
- a company becoming active for Corporation Tax purposes;
- an individual developing a new Self Assessment obligation; or
- a person failing to disclose another taxable activity that HMRC has not already been told about.
Each tax has its own rules and deadlines. Receiving income does not always mean that registration is required, so the position should be checked against the relevant allowances, exemptions and reporting requirements.
How does HMRC calculate a penalty?
Failure-to-notify penalties are generally tax-geared. This means that the calculation is based on the potential lost revenue, rather than automatically being a fixed charge.
HMRC considers the taxpayer’s behaviour. The main categories include:
- a non-deliberate failure;
- a deliberate but not concealed failure; and
- a deliberate and concealed failure.
For some deliberate and concealed domestic failures, the penalty can reach 100% of the potential lost revenue. Separate rules and potentially higher penalties can apply to offshore matters.
The actual result depends on the facts. A late notification will not necessarily produce a tax-geared penalty if no revenue was lost, although interest, filing penalties or other consequences may still need to be considered.
Does coming forward make a difference?
It can. HMRC distinguishes between prompted and unprompted disclosures, and an unprompted disclosure can provide access to lower penalty ranges.
The quality of the disclosure also matters. HMRC may consider how fully the taxpayer:
- explains what went wrong;
- helps calculate the tax affected; and
- provides access to relevant records.
Approaching HMRC first does not automatically make a disclosure unprompted. The precise status depends on what the taxpayer knew about HMRC’s interest at the time.
What if there was a reasonable excuse?
A penalty should not be payable where the taxpayer can establish a reasonable excuse for the failure and puts matters right without unreasonable delay after that excuse ends.
Reasonable excuse is considered according to the individual circumstances. Evidence should be retained, and assumptions about what HMRC will accept should be avoided.
Bottom line
If a tax notification or registration may have been missed, establish the relevant dates, quantify the tax position and act promptly. Registering is only part of the solution. Outstanding returns, payments, interest and supporting records may also need attention.
This article provides general information and is not personalised tax or legal advice. Penalty treatment depends on the specific facts.
How Naylor Accountancy Services can support you
Naylor Accountancy Services can help identify when a tax obligation arose, reconstruct the relevant figures, bring outstanding registrations and returns up to date, and prepare a clear disclosure for HMRC where appropriate. Early action can provide greater clarity, improve financial control and prevent an unresolved compliance issue from continuing to grow.
Main office: 01892 807 001
Chichester office: 01243 776088
Bourne End office: 01628 530805
Email: [email protected]
F. Verification sources
The final version should be checked against the guidance and legislation in force on 20 August 2026:
https://www.gov.uk/government/publications/compliance-checks-penalties-for-failure-to-notify-ccfs11
https://www.gov.uk/hmrc-internal-manuals/compliance-handbook/ch70000
https://www.legislation.gov.uk/ukpga/2008/9/schedule/41
https://www.gov.uk/limited-company-formation/company-records
https://www.gov.uk/register-for-self-assessment
https://www.gov.uk/register-for-vat
https://www.gov.uk/hmrc-internal-manuals/compliance-handbook/ch160000
https://www.gov.uk/hmrc-internal-manuals/compliance-handbook/ch82000
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Published by The NAS News Team
