How to appeal an HMRC Tax penalty

October 7, 2019


HMRC is currently in the news regarding the refund of certain penalties upon appeal, with the most recent stories including the refund of 6,000 child benefit penalty fines, the rescinding of numerous CGT penalties and rebates relating to stamp duty on derelict properties. 


But how easy is it to challenge and appeal a late payment or late filing penalty issued by HMRC?


For many penalty appeals there is a simple procedure to follow, with HMRC issuing very clear guidelines on what is accepted as a ‘reasonable excuse’ for having a penalty cancelled or amended.  A ‘reasonable excuse’ is considered to be an event or circumstance that prevents an individual from meeting a tax obligation on time, where reasonable care had initially been taken to meet the deadlines.  These can include:

  • A severe or life threatening illness

  • An unexpected stay in hospital

  • The death of a partner or close relative just before the payment deadline

  • Faulty computer equipment or software whilst completing the online forms

  • A delay caused by a disability

  • Prevention due to fire, flood or theft

  • Website downtime or HMRC service problems.

  • Delays due to unforeseen postal problems


Conversely, HMRC have also stated that some reasons are not considered to be a ‘reasonable excuse’ for the late filing of a return or payment of a liability and these are:

  • Simply making an error on your tax form

  • Failure of a nominated person to send in your tax return

  • Not having funds to pay the bill, or payment being declined by the bank

  • Not being able to understand the HMRC system and therefore file a tax return

  • A reminder was not received from HMRC


So how do you appeal?  When appealing against a penalty for an incorrect return, a delay in sending a payment or your tax return, or not keeping accurate records of your transactions, an HMRC representative is assigned to review the case.  

Each appeal must be lodged within the time limit - usually 30 days - and if the deadline is missed, an appeal may still be worthwhile but an explanation is required to determine whether the appeal may go ahead.

Instructions on how to appeal are included in the penalty letter along with an appeal form, or you may contact HMRC by letter or online.  Specifics for the different appeals are detailed on the HMRC website. 

However, as with the CGT penalties where it was deemed that insufficient publicity for some key changes had been provided, individual circumstances can also provide ample justification for appeal.

Consultation with your Everfair Tax advisor can help to effectively manage the sometimes complex process and maximize any financial benefits by using our experience to ensure that the appeal is given the best chance of succeeding.  For assistance, please call our friendly team on 01932 320800, email , or visit our website

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