The Government has admitted incorrectly slapping £100 late fees on taxpayers who filed their self assessment tax form on time. Estimates from accountancy firm Baker Tilly, which uncovered the error, suggests many thousands have been wrongly fined.

Those affected are being sent £100 demands by HM Revenue and Customs (HMRC) by post. Under the self assessment rules, you can submit your tax return online by 31 January. If you’re late, you risk a £100 penalty.

The problem is many of those who filed on time have also got a penalty notice. If you’ve been incorrectly fined you have to formally appeal. HMRC, despite admitting its error, will not automatically cancel a charge.  

However, if you formally complain, it promises to remove the payment demand from the files of those who submitted on time. Full details of how to appeal are printed on the back of the £100 demand.

An HMRC spokesman says: "We apologise to anyone who has received a penalty notice in error. There is no question of anyone having to pay a penalty if their return was filed on time. The penalty notice itself tells people what to do if they do not know why they have received a penalty notice."

HMRC doesn’t know exactly how many taxpayers have been wrongly charged but insists the figure is likely to be a “small” proportion of the nine million taxpayers who have to file a return.

George Bull, from Baker Tilly, says: "When we contacted HMRC we were told by one office the complaints about incorrect penalties had been ‘added to the growing pile’. Judging by the complaints we have already received, and the feedback from the HMRC, this problem could affect thousands of taxpayers.

"Only two weeks ago I received evidence where HMRC threatened to issue a penalty for a return that they acknowledged they had received on time but had lost."