I Received an HMRC Penalty Because I Did Not Close My Self Assessment When I Returned to Romania

You left the UK, but forgot this? HMRC does not forget you — and the penalties keep coming!

A complete guide for Romanians who left the UK but remained registered for Self Assessment

Many Romanians who worked in the UK as self-employed individuals, CIS subcontractors, sole traders, or Limited Company directors return to Romania assuming that once they stop working in the UK, their tax obligations end automatically.

Unfortunately, that is not how HMRC works.

If you were registered for Self Assessment and did not properly notify HMRC that you had stopped trading or that you no longer needed to file tax returns, HMRC may continue to expect a Self Assessment Tax Return from you every year.

This means you may receive penalties even if:

you no longer work in the UK;
you have had no further UK income;
you returned permanently to Romania;
you stopped using your UTR;
you no longer log into your HMRC account;
you did not receive HMRC letters because you no longer live at your old UK address;
you assumed that “if I have no more income, I do not need to declare anything.”

This is one of the most common tax problems for Romanians who leave the UK without properly closing their tax position.

In short: why did you receive a penalty?

You received a penalty because HMRC still considers you required to file a Self Assessment Tax Return.

If HMRC issued a notice to file, meaning an official request for a tax return, that obligation remains active until the situation is properly resolved.

In practice, one of the following usually needs to happen:

you submit the required tax return;
HMRC agrees that you did not need to file it;
HMRC withdraws the return for that tax year;
HMRC closes your Self Assessment record;
the penalty is cancelled following a successful request or appeal.

Leaving the UK does not automatically remove the obligation.

Having no income does not automatically remove the obligation.

Not receiving the letter does not automatically make the penalty disappear.

The real problem: HMRC does not always know that you stopped

For many taxpayers, the issue is not that they were trying to avoid tax.

The issue is that they left the UK without taking the correct administrative steps.

From HMRC’s point of view, there is a big difference between:

“I am no longer working in the UK”

and

“HMRC has been officially informed that I no longer need to file Self Assessment returns.”

These are not the same thing.

You may have been back in Romania for 2, 3, or even 5 years, but if HMRC still has an active Self Assessment record for you, the system may continue issuing return requests and penalties.

How do Self Assessment penalties arise?

For Self Assessment, the normal deadline for filing an online tax return is 31 January following the end of the tax year.

For example, for the 2025/26 tax year, which ends on 5 April 2026, the online filing deadline is 31 January 2027.

If the return is not filed on time, HMRC may issue automatic penalties.

These can include:

After the filing deadline:
An initial penalty of £100

After 3 months:
Daily penalties of £10 per day, up to a maximum of £900

After 6 months:
A further penalty of £300 or 5% of the tax due, whichever is greater

After 12 months:
Another penalty of £300 or 5% of the tax due, whichever is greater

If there is also unpaid tax, you may also face:

late payment penalties;
interest;
debt collection letters;
debt management action;
unnecessary stress;
administrative difficulties if you want to regularise your affairs or return to the UK.

On top of these penalties, if tax remains unpaid, HMRC may also charge late payment interest. This is calculated separately from late filing penalties and can increase the total amount due if the matter is ignored.

At the time this article was written, the HMRC late payment interest rate is 7.75% from 9 January 2026, although this rate can change. For that reason, you should always check the current rate before calculating the final amount due.

Important: late filing penalties can apply even if you do not owe any tax.

This is the part that surprises many people.

A lot of taxpayers say:

“But I didn’t owe anything.”

The problem is that if HMRC asked for a return, failing to file it can still lead to a penalty even where the tax liability is zero.

“But I was no longer in the UK. Doesn’t that matter?”

It matters — but not automatically.

If you left the UK, HMRC must be properly informed.

For HMRC, it is not enough that you physically left the country. There needs to be a clear tax update on your record.

Depending on your situation, this may include:

filing a final tax return;
reporting the date your self-employment ceased;
asking to be removed from Self Assessment;
updating your address;
reporting your departure from the UK in your Self Assessment return;
completing the tax residence section, if required;
using form P85 if you are not in Self Assessment;
clarifying whether you still had UK income;
checking whether any future obligations remain.

If these steps were not taken, HMRC may continue issuing tax return requests and penalties.

Self Assessment does not close automatically

This is the key point.

Self Assessment does not automatically close simply because:

you closed your UK bank account;
you stopped issuing invoices;
you stopped working as a CIS subcontractor;
you returned to Romania;
you moved out of your UK address;
you stopped receiving income;
you closed your business;
you stopped accessing your HMRC account;
you stopped receiving post.

HMRC must be informed.

If you were self-employed, you must notify HMRC that you ceased trading.

If you no longer need to file Self Assessment returns, you must ask to be removed from Self Assessment.

If HMRC is still asking for a return for a particular year, you must either file it or obtain confirmation that it is no longer required.

The difference between “I left the UK” and “I closed Self Assessment”

This is a very common misunderstanding.

Leaving the UK means you physically moved out of the country.

Closing Self Assessment means HMRC has been properly informed and no longer expects tax returns from you in future years.

These are two different processes.

You may have been living in Romania for years, but HMRC can still expect returns if you did not correctly close your tax affairs.

What should have been done when you left the UK?

If you left the UK and were self-employed or in Self Assessment, ideally you should have taken several clear steps.

1. You should have notified HMRC that your self-employment ended

If you were a sole trader, CIS subcontractor, or self-employed, you need to tell HMRC that you stopped trading.

This is separate from simply filing a return.

In most cases, you need:

your National Insurance Number;
your UTR;
the date your business ceased;
details of your final trading period;
information about your final income;
any final business expenses;
any CIS deductions;
any assets sold or retained.

If HMRC does not receive this information, it may assume that your business is still active or that you still need to continue filing returns.

2. You should have filed your final tax return

If your business ended, you will usually need to file a final tax return for the tax year in which you were still active.

That final return should include:

income up to the date trading ceased;
allowable expenses;
the final profit or loss;
any capital allowances;
any CIS deductions;
any employment income;
any rental income;
any other UK income;
tax residence information, where relevant.

For CIS subcontractors, the final return is especially important because there may be a tax refund due.

Many subcontractors had 20% CIS deductions withheld at source. If the final profit and actual tax liability are lower than the deductions made, tax may be repayable.

3. You should have asked to be removed from Self Assessment

Once your final position is clarified, you can ask HMRC to close your Self Assessment record or remove you from Self Assessment for future years where you no longer need to file.

Be careful: even if you told HMRC that your self-employment ended, HMRC may still keep expecting future returns.

If you no longer need to file, you need to tell them explicitly.

This part is very important.

Some taxpayers believe that once they file the last return, everything closes automatically.

That is not always the case.

4. You should have reported your departure from the UK correctly

If you were already in Self Assessment, leaving the UK is normally reported through your Self Assessment return.

In many cases this involves the tax residence section, commonly known as SA109.

If you were not in Self Assessment, form P85 may be relevant to inform HMRC that you have left or are leaving the UK, and to claim any possible refund of employment tax.

P85 or Self Assessment? What is the difference?

This is another very common area of confusion.

If you were not in Self Assessment

If you were only employed in the UK and did not file Self Assessment returns, form P85 may be relevant when you leave the UK.

P85 can help HMRC update your tax position and, in some cases, calculate whether you are due a refund for the year of departure.

For example, P85 may be relevant if:

you were employed in the UK;
you left the UK during the tax year;
you were not required to file Self Assessment;
you want HMRC to check whether you overpaid PAYE tax;
you are not returning to the UK, or are leaving for a long period.

If you were already in Self Assessment

If you were already filing Self Assessment, departure from the UK usually needs to be reported through Self Assessment, not just through P85.

In that case, form SA109 may be required.

Important: SA109 cannot be filed through the standard free HMRC online Self Assessment service.

It is usually filed by:

paper filing;
commercial software;
an accountant or tax adviser.

This difference matters a lot.

If you were self-employed or otherwise required to file Self Assessment, a P85 on its own may not be enough to close your tax position properly.

What is SA109 and why does it matter?

SA109 is the Self Assessment section used for tax residence, remittance basis, and issues relating to leaving or coming to the UK.

It is important because it may help determine:

whether you were UK tax resident;
whether split-year treatment applies;
whether you became non-resident after leaving;
which income must still be reported in the UK;
whether you remain entitled to the Personal Allowance;
how UK income after departure should be treated;
whether any UK filing obligations continue.

If you left the UK during a tax year, SA109 may be essential.

“I had no income. Why do I still need to file?”

Because the filing obligation does not always depend only on whether you owe tax.

If HMRC issued a notice to file, you must respond.

There are only two real options:

file the return; or
ask HMRC to withdraw the return if it was not actually required.

If you do nothing, the system may issue automatic penalties.

Even a return showing zero income may still be required if HMRC asked for it.

This is one of the biggest traps.

For HMRC, the key question is not simply:

“Did you have income or not?”

The real question is:

“Were you officially asked to file a return — and did you respond?”

“I did not receive the letters because I was in Romania”

This is a common situation, but it does not automatically guarantee cancellation of the penalty.

HMRC expects your contact details to be kept up to date.

If you leave the UK, it is your responsibility to notify HMRC of your change of address and to clarify your tax position.

That said, in some cases, not receiving the correspondence may help explain the situation, especially where there were other serious circumstances or where you acted quickly as soon as you became aware of the penalty.

For example, the following may help:

proof that you moved to Romania;
proof of the date you left the UK;
evidence that you had no further UK income;
evidence that you did not receive the letters;
evidence that you acted promptly when you found out;
documents showing that the situation was not deliberately ignored.

However, simply saying:

“I didn’t know”

“I didn’t receive a reminder”

is usually weak on its own.

Can the penalty be cancelled?

Sometimes, yes.

But not every penalty can be cancelled.

At this stage, what matters is understanding that there are a few possible routes:

HMRC may withdraw the return request if you should not have been asked to file;
you may be able to appeal if you had a genuine, documented reason;
you may submit the missing returns and then seek reduction or cancellation of the penalties;
you may clarify which years you no longer had any filing obligation for;
you may close Self Assessment for future years so the problem does not continue.

The important thing is this: many penalties are worth checking before simply accepting them as final.

What should you do immediately if you received a penalty?

If you received an HMRC Self Assessment penalty after leaving the UK, do not ignore it.

The next steps are critical.

Step 1: Check which tax year the penalty relates to

The letter should show the relevant tax year, such as:

2021/22;
2022/23;
2023/24;
2024/25;
2025/26.

Do not assume the penalty relates to the year in which you received the letter.

The penalty relates to a specific tax year.

Step 2: Check whether HMRC actually requested a return

You need to check whether HMRC issued a notice to file.

If it did, then either the return must be filed or the filing requirement must be withdrawn if it was not needed.

If you do not check this properly, you may deal with the issue incorrectly.

Step 3: Check whether you had any continuing UK income

Even if you moved back to Romania, you may still have had UK income.

Examples include:

CIS income;
employment income;
UK rental income;
dividends from a UK company;
director’s salary;
bank interest;
capital gains;
sale of UK property;
income from a UK business;
pension income;
High Income Child Benefit Charge;
student loan obligations.

If you had any UK income, the position must be reviewed carefully.

It is not enough to say:

“I live in Romania now, so HMRC no longer applies to me.”

Some UK income can remain reportable in the UK even after you leave.

Step 4: File the necessary returns or ask for them to be withdrawn

If the return is required, it needs to be filed.

If it is not required, you should ask HMRC to withdraw it.

Sometimes HMRC may still require a final return to close the position.

Each tax year must be checked separately.

There may be one year in which you did need to file, and another year in which you did not.

Step 5: Only appeal if there is a real basis

If there are valid grounds, an appeal can be made.

But the appeal must be clear, chronological, and supported by evidence.

It is not enough to write:

“I left the UK and didn’t know.”

A much better explanation would cover:

when you left;
when your business stopped;
whether you had any income after that;
why you did not receive notices;
when you became aware of the penalty;
what you did immediately afterwards;
what documents you can provide;
why you believe the penalty should be reviewed or cancelled.

Step 6: Close Self Assessment properly for the future

Even if the current penalty is resolved, you still need to make sure the problem does not continue.

Ask HMRC to:

mark your self-employment as ceased;
update your address;
confirm whether you still need to file returns;
withdraw any unnecessary returns;
close Self Assessment if no further obligations remain;
confirm whether any further penalties, interest, or outstanding returns still exist.

The goal is not just to deal with the current penalty.

The goal is to stop the problem from continuing in future years.

What documents may help?

The following documents may help clarify your situation or support an appeal:

proof of leaving the UK;
flight, coach, ferry, or other travel evidence;
employment contract in Romania;
proof of Romanian residence;
tenancy agreement or property documents in Romania;
proof that your self-employment ended;
your last UK invoice;
your last payslip;
P45;
P60;
CIS statements;
bank statements;
contracts;
emails to clients;
proof that you had no further UK income;
HMRC letters received late;
proof of address change;
medical evidence if illness was involved;
documents showing serious family circumstances;
correspondence with HMRC;
previous confirmations from an accountant, if any.

The more clearly documented your explanation is, the better your chances of resolving the matter.

When “I left the UK” is not enough

There are situations where, even if you left the UK, you may still have UK tax obligations.

You rented out a UK property

UK rental income can still be taxable in the UK even if you now live in Romania.

In this case, closing Self Assessment may not be appropriate.

You may need to consider the rules for landlords, non-resident landlords, and UK tax reporting.

You have a UK Limited Company

If you are a director or shareholder of a UK company, there may be separate obligations for the company and for you personally.

The company may still have obligations such as:

annual accounts;
Corporation Tax Return;
Confirmation Statement;
payroll;
VAT;
director obligations.

Separately, you may still have personal Self Assessment obligations if you received dividends, salary, director’s loan benefits, or other taxable income.

You sold a UK property

The sale of UK property may require UK tax reporting, including for non-residents.

This is a sensitive area and should be checked separately.

You continued receiving UK income

Even if you now live in Romania, some UK income can remain relevant for UK tax purposes.

Examples include:

rental income;
dividends;
salary;
pensions;
interest;
business income;
capital gains;
CIS income;
income from a UK company.

You had unclaimed CIS deductions

If you worked under CIS before leaving, you may still be owed a tax refund.

But to calculate this correctly, the appropriate tax return must be filed.

This is one of the situations where a person may receive a penalty but may also be due money back.

You may have received a penalty — but still be due a refund

An important point: some people who receive penalties may also be due tax repayments.

Examples include:

excessive CIS tax deductions;
overpaid employment tax in the year of departure;
incorrect tax code;
leaving the UK during the tax year;
only working for part of the year;
unclaimed expenses;
unused Personal Allowance.

In these situations, filing the correct return may show that a refund is due — even though penalties were issued first.

However, be careful: penalties do not automatically disappear just because a refund is due.

They must be dealt with separately.

Practical example 1: CIS subcontractor who returned to Romania

Ion worked in the UK as a CIS subcontractor until August 2022.

He returned to Romania and did not work in the UK again.

He did not file his 2022/23 return and did not notify HMRC that his self-employment had ended.

In 2024, he receives penalties for failing to file.

What should be done?

check whether HMRC issued a notice to file;
file the final 2022/23 return;
include CIS deductions;
check whether a refund is due;
notify HMRC that self-employment ceased;
request removal from Self Assessment for future years;
check whether the penalties can be challenged;
update the address to Romania.

Practical example 2: Person with no income after leaving

Maria was self-employed in the UK but ceased trading in March 2021.

She moved back to Romania and had no further UK income.

HMRC continued requesting returns for 2021/22, 2022/23, and 2023/24.

Maria receives penalties for several years.

What should be done?

review each tax year separately;
identify the real final year of trading;
file the final return if it is missing;
request withdrawal of returns for years where there was no filing obligation;
request cancellation of the related penalties if HMRC accepts the withdrawal;
close Self Assessment for the future;
retain evidence that there was no further UK income.

Practical example 3: Person who left the UK but kept a UK property

Andrei returned to Romania but kept a house in the UK and rented it out.

He believes he no longer needs to file Self Assessment because he no longer lives in the UK.

That is a mistake.

UK rental income can remain reportable in the UK even if Andrei is now resident in Romania.

In this case, it is not enough simply to ask for Self Assessment to be closed.

The UK property income, non-resident status, and continuing filing obligations all need to be reviewed.

What NOT to do

If you received an HMRC penalty after leaving the UK, avoid the following mistakes.

Do not ignore the letter

Penalties can increase. If you do not act, the matter can move into debt management or collection.

Do not assume it will “clear itself”

HMRC does not automatically close matters just because you left the UK. The system may continue issuing penalties.

Do not appeal without explanation

A short, vague message has little chance of success. A proper appeal must be logical, documented, and fact-based.

Do not say things that are not true

HMRC can check data, income records, CIS records, PAYE records, bank information, letters, and tax history. A false explanation can make things worse.

Do not file incorrect returns just to get rid of the issue quickly

An inaccurate return can create bigger problems than the penalty itself.

Do not only close the current year and ignore earlier years

The whole outstanding period needs to be reviewed. More than one tax year may be affected.

What should you do properly?

A professional process should normally look like this:

1. Full review

Check:

outstanding tax years;
existing penalties;
whether a notice to file exists;
actual income;
date of departure;
date trading ceased;
residence status;
the address held by HMRC;
possible refunds.

2. Regularisation

File the necessary returns or ask for the unnecessary ones to be withdrawn.

Each tax year must be handled correctly.

3. Closure

Notify HMRC that self-employment has ceased and request closure of Self Assessment if no further obligations remain.

4. Penalty review

Check whether the penalties can be challenged.

Not all penalties can be cancelled, but some can be removed if HMRC accepts that the return was not required or that there was a genuine, documented reason.

5. Written confirmation

Ask HMRC to confirm in writing that the position has been closed or clarified.

This is important so that the same problem does not continue next year.

Why is it important to act quickly?

Because delay can mean:

larger penalties;
interest;
debt management letters;
unnecessary stress;
missing the appeal deadline;
problems if you return to the UK;
difficulty obtaining tax documents;
blocked refunds;
continued filing obligations in future years.

Even if you left the UK several years ago, the situation can still be fixed.

But it needs to be handled correctly.

Frequently asked questions

I left the UK. Do I still need to file Self Assessment?

It depends.

If HMRC asked you to file a return, you need to respond.

If you had continuing UK income, you may still need to file.

If you no longer have a filing obligation, you need to ask HMRC to remove you from Self Assessment or withdraw the return request.

If I had no income at all, can I ignore the return?

No.

If HMRC issued a return request, ignoring it can lead to penalties.

You must either file the return or ask HMRC to withdraw it.

Can the penalty be cancelled?

Yes, in some cases.

It may be cancelled if HMRC accepts that you did not need to file the return, or if a valid appeal is accepted.

But each case has to be reviewed individually.

Is “I left the UK” enough on its own?

Not usually.

It may help as part of the explanation, but it normally needs to be supported by facts and documents.

Simply leaving the UK is not enough if HMRC was not properly informed.

Do I need to pay the penalty before appealing?

It depends.

In some cases, it may be sensible to pay to limit further interest or administrative problems, and then continue with the appeal.

In other cases, it may make more sense to first clarify whether the return was required at all.

The important thing is not to ignore the penalty and to review your options quickly.

Can I close Self Assessment online?

In many cases, yes — you can request online not to send Self Assessment returns anymore or notify HMRC that you ceased self-employment.

You will generally need:

your National Insurance Number;
your UTR;
the date trading ceased;
details of your tax position.

If you cannot use the online service, you can contact HMRC by phone or post.

If I worked under CIS, could I be due a refund?

Yes, possibly.

Many CIS subcontractors had 20% deductions withheld at source.

If your actual profit and final tax liability were lower than the amount deducted, a refund may be due.

But the correct return still needs to be filed.

If I live in Romania now, can I still sort this out?

Yes.

You can resolve the matter even if you no longer live in the UK.

Documents can be prepared remotely, and communication with HMRC can be handled online, by post, by phone, or through an authorised tax agent.

Conclusion

If you received an HMRC penalty because you did not file Self Assessment after returning to Romania, the issue should not be ignored.

HMRC does not automatically close Self Assessment just because you left the UK.

If you were self-employed, a CIS subcontractor, or registered for Self Assessment, you need to formally clarify your position.

The correct steps are:

review the outstanding tax years;
identify whether HMRC requested returns;
file the final return if necessary;
ask for returns to be withdrawn where they were not required;
close your self-employment record;
request removal from Self Assessment;
check whether the penalties can be challenged;
update your address;
keep HMRC’s confirmation.

Leaving the UK does not automatically mean that your tax obligations end.

If you do not notify HMRC correctly, the system may continue issuing returns, penalties, and letters.

Received an HMRC penalty after leaving the UK?

DCTaxAgent Ltd can help you review your position, identify outstanding years, prepare the required tax returns, close your Self Assessment record, and check whether the penalties can be challenged legally.

We can help with:

outstanding Self Assessment returns;
closing your self-employment record;
closing Self Assessment;
HMRC penalty appeals;
CIS tax refunds;
final tax returns after leaving the UK;
SA109 and tax residence issues;
P85 where applicable;
communication with HMRC.

DCTaxAgent Ltd
Accounting | Tax | Advisory

Phone / WhatsApp: 07587 532646
Email: contact@dctaxagent.co.uk
Website: www.dctaxagent.co.uk

Disclaimer: This article provides general information only and does not constitute personalised tax advice. The tax treatment depends on each individual’s exact circumstances, the tax years involved, the income received, and the correspondence issued by HMRC.