HMRC Confirms Major Crackdown as 5,200 Households Face Up to £3,000 Fines

HM Revenue & Customs (HMRC) has intensified its enforcement of inheritance tax (IHT), resulting in a 33% increase in penalties. In the 2024-25 period alone, 5,200 estates’ executors have been fined a total of £3.1 million for filing their IHT returns late, according to data released under Freedom of Information laws. The average penalty per case stands at £596, with fines starting at £100 but potentially rising to £3,000 after a year of non-compliance.

Rachael Griffin, a representative from wealth management firm Quilter, described the delays in submitting forms as “inevitable.” She explained that as more modest estates fall under HMRC’s scrutiny, many executors attempt to manage the complex filing process without professional advice. “Executors are often navigating this for the first time and face a process that is paperwork-heavy, deadline-driven, and not user-friendly. As a result, delays—and subsequent penalties—are common,” Griffin said.

She further warned of an increase in penalties starting April due to upcoming changes that will bring pension death benefits more clearly into the inheritance tax framework, thus expanding the number of estates liable and the complexity of filings.

Duncan Mitchell-Innes of TWM Solicitors highlighted the demanding nature of the IHT paperwork, noting that the basic inheritance tax form (IHT400) includes 122 detailed questions. Depending on the estate’s complexity, additional schedules—over 30 in total—may be required to fully comply.

HMRC, however, disputes claims that penalties will become more frequent. A spokesperson insisted that reporting requirements were actually reduced for most non-taxpaying estates during this time. The agency emphasized ongoing efforts to streamline the process, citing a government investment of £52 million aimed at simplifying and digitalising the inheritance tax service to make filing faster and easier for executors.