Failure to Notify is a penalty for not letting HMRC know about changes that affect the amount of tax you would pay.
You have to tell HMRC about new sources of income as soon as possible. For example:
If you don’t do this, HMRC will charge a Failure to Notify penalty. How much you need to pay depends on how much tax you omitted and how cooperative you are. It can go as high as 100% of the tax you need to pay if you’ve tried to conceal the income source deliberately.
If you also had to file a Self Assessment tax return and didn’t, HMRC will add on top late filing and late payment penalties as well – plus interest.
However, if you have a reasonable excuse, you can appeal on the gov.uk website and have the Failure to Notify penalty cancelled or reduced – but keep in mind that a reasonable excuse is only something very serious like illness or bereavement.