A Step-by-Step Guide to Appealing HMRC Daily Penalties

HMRC daily penalties are £10 charged for every day a Self Assessment return is outstanding once it is more than three months late, up to a maximum of 90 days. The cumulative figure of £900 is large enough to make appealing worthwhile and the structure of the penalty makes it more vulnerable to a successful appeal than the £100 fixed penalty. This guide walks through the daily-penalty appeal step by step, including the procedural points that distinguish it from a standard SA370 challenge.

How HMRC Daily Penalties Actually Work

Daily penalties begin the moment your Self Assessment return is three months past the original 31 January deadline. From 1 May, every day the return remains unfiled adds £10 to the running total. The charges accumulate silently in HMRC's system. You will not receive a daily letter. You will get one notice, usually after the daily charges have run for some time, showing the full accumulated figure.

The cap is £900, hit at 90 days of daily charges. After that the structure shifts to the 5% surcharge at six months and again at twelve months. Daily penalties are uniquely the late-filing charge that is purely time-driven, with no link to the size of your tax bill.

Why Daily Penalties Are More Appealable Than the £100 Fine

A reasonable excuse for the £100 fixed penalty has to cover the original 31 January deadline. A reasonable excuse for the daily penalties has to cover an extended period from 1 May onwards. That sounds harder. In practice it is often easier, because:

1. 1A long-running illness or caring responsibility that bridges January through May fits the daily-penalty timeline naturally even when it does not perfectly fit the 31 January deadline.
2. 2Many appeals against the £100 fail on "you should have filed on estimates." That argument is much weaker for daily penalties because filing on estimates would also have stopped the daily clock, but the same medical or personal circumstance that prevented the 31 January filing is plausibly preventing any filing through May.
3. 3Where the £100 fixed penalty sticks because the immediate deadline excuse is thin, the daily penalty can still be cancelled if you can show the underlying circumstance continued.

The Daily Penalty Appeal, Step by Step

Step 1: File the Return First

HMRC will not process the appeal until the return is in. Filing on estimates with a note that an amendment will follow is fine. Without this step nothing else moves.

Step 2: Identify the Daily Penalty Notice Date

The notice is a separate letter from the £100 fixed penalty notice. It will typically be headed something like "Daily Late Filing Penalties." The date in the top right is the start of your 30-day appeal window for these specific charges.

Step 3: Submit an SA370 With Daily-Penalty Framing

Use the same SA370 form, online or on paper. In the grounds section, the framing differs from a £100 appeal. Cover the entire period from the original deadline through the date you actually filed, not just the lead-up to 31 January. The caseworker is looking at why filing was prevented across the whole window, not just at one moment.

Step 4: Evidence the Sustained Period

For an illness-based appeal, GP and hospital records covering the full duration. For a bereavement, evidence of estate administration timelines that explains the sustained absence from your own affairs. For a caring scenario, evidence that the care was sustained through the relevant months.

Step 5: Address the "Why Not File Earlier" Question Explicitly

A common rejection ground for daily-penalty appeals is "you could have filed on estimates at any point during the daily period." Pre-empt this in the appeal itself. Explain why estimated filing was not viable for you during the period: incapacity to handle administrative work, lack of access to even basic records, or other documented reasons.

A Worked Daily-Penalty Appeal

A composite scenario: a sole trader received the £100 fixed penalty in February 2026 and did not appeal it. He was diagnosed with a serious cardiovascular condition on 12 February. Surgery followed in March. Recovery and rehabilitation absorbed April and most of May. He filed the return on 24 May after his physiotherapist signed him off as ready to resume office work.

By the time the daily penalty notice arrived in late June, the £100 appeal window was long gone. But the daily charges had only run for around 24 days (1 May to 24 May), totalling £240, and the daily-penalty notice itself was within 30 days of submission. He submitted an SA370 covering the period 12 February to 24 May with hospital records, surgical notes, GP confirmation of post-operative incapacity, and the physiotherapist sign-off date as the file-back-to-work moment.

HMRC accepted the daily-penalty appeal in 31 days. The £240 in daily charges was cancelled. The £100 fixed penalty stayed in place because it had not been appealed within its window. He paid the £100 and saved the £240. The same evidence, presented inside the original window, would also have cancelled the £100.

Common Questions About Daily Penalty Appeals

Can I appeal both the £100 and the daily penalty in the same SA370?

Yes, where you are inside both 30-day windows. Single appeal, both penalty references listed, single grounds section covering the full period. This is the cleanest approach and is how specialists handle bundled appeals routinely.

What if my daily penalty notice arrived months after the daily charges started?

The 30-day window runs from the notice date, not the start of the charges. Even if HMRC notified you slowly, your appeal window starts from when they actually told you. Save the original envelope or e-notice timestamp as evidence of when you received it.

Does HMRC consider partial appeals on daily penalties?

Yes. If your reasonable excuse covered February through April but not May, HMRC can cancel the daily charges accrued during the excused period and uphold them for the unexcused period. Frame the appeal accordingly rather than claiming a blanket excuse for the whole 90 days.

If the £100 was already paid, can the daily-penalty appeal still succeed?

Yes. Payment of one penalty has no procedural effect on the appeal of another. The two charges are separate notices with separate appeal rights.