By the end of January in a usual year, we’d expect most businesses to have their self-assessment returns done and dusted and to be moving on to their plans for the rest of the year.
This year, in light of COVID-19 disruption, HMRC has waived the late-filing penalty for one month.
This gives taxpayers until midnight on 28 February 2022 to file their return before the automatic £100 late-filing penalty applies, although it’s worth noting that the 31 January deadline to file and pay remains, and interest is charged as usual from 1 February.
If you do miss the deadline – or if there were issues with your return or records – you might find yourself facing a penalty from HMRC.
As long as you have a valid reason, it is possible to contest this decision and in some cases get the fine cancelled. Here’s how.
Can you appeal a tax penalty?
You can appeal against a penalty from HMRC, whether that’s for late filing, late payment of tax, inaccuracies, or inadequate records, as long as you have a reasonable excuse.
You’ll usually need to make your appeal within 30 days of the date HMRC sent you a penalty notice, although in some circumstances they may consider older appeals.
What is a reasonable excuse?
A ‘reasonable excuse’ is HMRC’s term for a valid reason to appeal a penalty. It’s something that stopped you from meeting a tax obligation, despite you taking reasonable care to meet it.
HMRC provides some examples of these, such as the death of a close relative shortly before the tax deadline, a serious or life-threatening illness, or an emergency situation like fire, flood or theft.
You might also have a reasonable excuse in less serious circumstances – for instance, if your computer or software failed just before deadline day or while you were preparing your online return, if you experienced issues with HMRC’s online service, or in the event of postal delays you couldn’t have predicted.
But generally speaking, it has to be a situation outside of your control. Your excuse won’t be considered reasonable if, for example, you relied on someone else to send your return and they didn’t do it, or if you made a mistake on your return.
How to appeal a self-assessment tax penalty
The process for appeals will depend on the type of penalty you’re facing and the reason for it.
If you didn’t send a return because you no longer need to be self-assessed, you can contact HMRC online or via the helpline to tell them this.
Otherwise, you’ll need to make sure you’ve sent your return before you make an appeal.
If you’re appealing a £100 fixed late-filing penalty for self-assessment, you can do this online through your Government Gateway account.
For other penalties, you’ll need to do it by post, using form SA370.
HMRC will then consider your appeal and write to inform you of the outcome. If they agree to amend the decision, they’ll cancel the penalty or pay it back to you, along with any interest, as long as you don’t have any other outstanding amounts to pay.
If they reject your appeal, you can request a review to be carried out by a HMRC official who wasn’t involved in the original decision. This will usually take around 45 days.
From there, if you still disagree, you can appeal to the tax tribunal or consider HMRC’s alternative dispute resolution service.
Don’t go it alone
At Mayflower Accountancy we use specialist software and efficient self-assessment processes to prevent, as far as possible, any penalties for late or inaccurate filing. But in the event you do get a letter from HMRC, we’ll help you every step of the way.
We can manage a tax appeal on your behalf, liaising with HMRC and setting out your disagreement in writing. Then if you need to take it any further, we can guide you on your options.
Talk to us about appealing a tax penalty.