HMRC overturned a record 48,189 tax penalties in 2025/26, with this 4% up on the previous year. The analysis shows that around 65% of the penalties that taxpayers appealed were cancelled. The figures have raised concerns about HMRC’s use of automated systems to issue penalties for missed Self Assessment, VAT and tax-payment deadlines. Andrew Park of Price Bailey said: "Because these are high-volume, automatically generated fines, they lack human oversight at the point of issuance," while Sean Drury of Blick Rothenberg warned that there are "an awful lot of these automatic penalty notices that go out which are actually incorrect." It is noted that for taxpayers within the scope of Making Tax Digital, automatic fines have been replaced with a new penalty-points system. Instead of an immediate £100 fine for a missed quarterly return, taxpayers will receive a penalty point. If deadlines are missed four times in two years, a £200 fine is issued. The HMRC data shows that the overall number of penalties issued has fallen from around 9.1m in 2024/25 to 8.1m in 2025/26.
