by Asim Abbas
12 November 2026 
HMRC disclosure penalties and interest: what a voluntary disclosure will cost
HMRC disclosure penalties and interest: what a voluntary disclosure will cost
The biggest worry for most people making a disclosure is the cost. A disclosure has three parts: the tax, the interest and the penalty. The penalty is where coming forward early makes the most difference.
- Interest runs daily from when the tax was due until it is paid.
- Penalties can be up to 100% of the tax for UK matters and up to 200% for offshore matters.
- Penalties are usually lower when you come forward voluntarily.
- If your disclosure covers more than 3 years, the reduction may be limited.
- If you took reasonable care, HMRC does not expect a penalty.
HMRC expects you to work out the penalty yourself, and it can reject a disclosure if the penalty is wrong.
This guide explains how penalties and interest work, based on HMRC’s guide to making a disclosure, updated 15 October 2026.
The three parts of a disclosure
- Tax you should have paid
- Interest for paying late
- a penalty, unless you took reasonable care
Interest
According to HMRC’s guide, interest is charged every day from the date the tax was due until the date it is paid. If the interest in your disclosure is wrong, HMRC will reject it. HMRC provides a penalties and interest calculator covering up to 20 years, but you must work out the tax first.
Penalties
- UK income or gains: up to 100% of the tax owed
- Offshore income or gains: up to 200%, depending on the category of the territory involved
- Reasonable care: HMRC does not expect to charge a penalty, though it says few people fall into this category
The exact percentage depends on why the tax was missed and whether you told HMRC before it contacted you. HMRC’s factsheets on inaccuracy and failure-to-notify penalties set out the ranges.
Estimate your disclosure
Our free HMRC disclosure calculator works out tax, interest to today and penalties for each year, with PDF or CSV download.
How to keep the penalty down
- Come forward first. Penalties are usually lower for voluntary disclosures.
- Tell, help and give access. Explaining what went wrong, helping with the figures and providing records all reduce the penalty.
- Act quickly. If the disclosure covers more than 3 years, or you took a long time to correct things, the reduction may be capped at 10 percentage points above the minimum.
Fixed-fee accountancy support
Transparent monthly packages for sole traders, landlords and limited companies. Fixed fees agreed upfront, VAT included.
Get a fixed-fee quoteCall 0161 531 4179Other things to know
- you may face a penalty of up to £3,000 for failing to keep proper records
- by disclosing penalties, you give up your right to silence on what you tell HMRC
- deliberate defaulters can be named publicly if they do not follow the required steps
- in limited cases, company officers can be personally liable for a company’s penalty
An illustration
Suppose you owe £10,000 of tax on undeclared UK income from careless errors and disclose before HMRC contacts you. You pay the £10,000, daily interest from each due date, and a penalty that is a percentage of the £10,000. Coming forward and co-operating fully keeps that percentage at the lower end of the range. Your exact figures depend on your circumstances, which is why we calculate them before anything is sent.
Next, read how many years you need to disclose and how the Digital Disclosure Service works.
Voluntary disclosure help near you
We help clients make disclosures across the UK, including London, Manchester, Birmingham, Leeds, Liverpool, Bristol, Newcastle, Cardiff and Wales, and in Scotland from Glasgow to Edinburgh. Start with our voluntary tax disclosure service.
What should I do next?
Unprompted disclosures attract lower penalties.
Then add interest and the penalty.
Co-operation reduces the penalty.
We make sure HMRC will accept the figures.
Frequently Asked Questions
What is the maximum penalty for undeclared income?
Up to 100% of the tax for UK matters and up to 200% for offshore matters.
Do I pay a penalty if I took reasonable care?
HMRC does not expect to charge a penalty where you took reasonable care.
How is interest worked out?
Daily, from the date the tax was due until it is paid.
Why would HMRC reject my disclosure?
Common reasons are wrong interest, a wrong penalty, or a disclosure that is incomplete.
Can I reduce the penalty?
Yes. Coming forward voluntarily, co-operating and acting quickly all help.
Need help with this? Wingate Accountants offers fixed-fee online accountancy support across the UK. Call 0161 531 4179 or request a quote at wingateaccountants.co.uk.
About the Author
Ali Imran
I’m Ali Imran, an accountant at Wingate Accountants. I help sole traders, landlords and directors get their returns filed early and accurately, without the last-minute panic.
