HMRC has confirmed its new approach to appeals made against tax return late filing penalties. How will this affect you in the unlikely event you miss a tax return deadline?
The law allows you to appeal against a fine for sending in a self-assessment tax return late. But it will only be successful, and the penalty cancelled if you have a “reasonable excuse”.
"Reasonable excuse" is not defined in legislation, but in practice HMRC takes a tough line and only accepts an appeal without challenge where, for example, serious illness, bereavement or provable technology failures were the cause of the lateness.
HMRC routinely responds to appeals by asking for more information and perhaps even documentary evidence to back up your excuse. This isn’t always easy to provide or might simply be too much to handle in the case of a bereavement or serious illness. It could often take months to resolve the appeal.
In May 2015, HMRC conceded that it doesn’t have the resources to thoroughly check every appeal and so has changed its guidance to tax inspectors. In essence it says they should accept an appeal at face value.
While the period normally allowed for appeals (30 days from the date the penalty notice was issued) has passed for 2013/14 late filing penalties, HMRC will consider one if it’s sent now. As long as you have a reasonable excuse there’s a good chance of your appeal being accepted.
Tip: To increase your chances of a successful appeal against a penalty you should submit the return online, or on paper if you’re having technical issues, as soon as possible after whatever problem caused you to miss the deadline is resolved.
In short, the HMRC will now accept appeals without further comment or enquiry provided your excuse is reasonable. Appeals, although already outside the normal period allowed, can still be made against penalties for 2013/14 tax returns.