Late Filing Penalties and Appeals
Help with your Tax Return guide
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The penalties for filling a tax return late are very high. Penalties of £1,600 or more accrue over the first 12 months from the filing date. How best to deal with late filing penalties depends on your circumstances, so it is worth considering all the points below before taking action.
There could be some delay before you become aware of the level of the penalties being charged. This may be because you have moved or stopped being self-employed. If your circumstances have been difficult – for example you may have health, debt or other issues – you may not have kept up with the HMRC paperwork.
The usual timescale over which penalties accrue is shown in the table below:
Timescale
|
Tax return for year: |
2017 |
2016 |
2015 |
|
Information for year to: |
5 April 2017 |
5 April 2016 |
5 April 2015 |
|
Normal filing date: On paper On-line |
– 31 October 2017 31 January 2018 |
– 31 October 2016 31 January 2017 |
– 31 October 2015 31 January 2016 |
|
Penalties charged: £100 Up to £900 (90 days at £10 a day from 3 months late) £300 – 6 months late £300 – 12 months late (Total £1,600) |
On-line 1 February 2018 From 1 May 2018 for 90 days at £10 a day —– 1 August 2018 1 February 2019 |
On-line 1 February 2017 From 1 May 2017 for 90 days at £10 a day —– 1 August 2017 1 February 2018 |
On-line 1 February 2016 From 1 May 2016 for 90 days at £10 a day —– 1 August 2016 1 February 2017 |
Notes:
- Penalties for paper returns run three months earlier
- These are the basic penalties – they may be higher if you owe a lot of tax
- Late payment penalties are due in addition to the late filing penalties
- Penalties for tax returns for the tax year to 5 April 2017 will start to accrue from 31 October 2017 for paper returns, and 31 January 2018 for on-line returns
What to do if you have been charged late filing penalties
Asking for a return to be withdrawn
If you did not need to complete a tax return for the year for which penalties are charged, you should ask HMRC to withdraw the return. HMRC can do this if all your income was taxed at source (eg through PAYE, or if taxed savings income), or you had no taxable income for that tax year. HMRC cannot withdraw a return just because you have no tax liability – so if you were self-employed, you will need to file a return even if your taxable profit is low enough for no tax to be due. To ask for a return to be withdrawn, phone HMRC on 0300 200 3310. If HMRC will not withdraw a return when you feel a return was not due, please contact TaxAid.
Appealing against a late filing penalty
Late filing penalties can be cancelled if you have a ‘reasonable excuse’ for filing late. The issue of ‘reasonable excuse’ is considered below. You should file your tax return before making your appeal against the late filing penalties.
Initially you make your appeal to HMRC. The appeal should normally be made within 30 days of the penalty notice being issued, but HMRC may consider late appeals. If HMRC does not allow your late appeal, you can apply to the Tax Tribunal to have your appeal allowed.
Appeals need to be made in writing and this may be done using form sa 370. Form 371, accessible from the same page, should be used for partnership late filing penalty appeals.
HMRC expects you to file the tax return as soon as you are able to do so – within 14 days of the end of the special circumstances which caused you to file late.
If HMRC rejects your appeal you can ask HMRC to review the decision. The review will be carried out by a different HMRC official. You should consider asking for a review if you missed out significant information on your initial appeal letter. Failing this you may appeal to the First Tier Tribunal (Tax). This is considered below.
You may also ask HMRC to reduce the penalty due to special circumstances.
Reasonable excuse
If HMRC, or the Tribunal, accept that you have a “reasonable excuse” , the entire penalty is cancelled. Points to consider are:
- The ‘reasonable excuse’ must continue throughout the period from the missed filing date until shortly before you actually file the return. This means that if it is accepted that you had a ‘reasonable excuse’ for some, but not all, of this period, the penalties will not be cancelled.
- HMRC takes a narrow view of what is a ‘reasonable excuse’. HMRC’s view can be found at https://www.gov.uk/tax-appeals/reasonable-excuses
- The tribunal may, in some cases, take a wider view of what is reasonable. For example, the tribunal may accept that you had a reasonable excuse if you relied on your accountant, and it was reasonable to expect that your accountant would file on time, and you did all you could to ensure this. But this will not apply if your accountant has previously been unreliable – for example if returns for previous years were filed late by your accountant.
- If you register for on-line filing before the 31 January filing date, but do not get your access code in time to file before the deadline, HMRC may accept this as a reasonable excuse.
Appeals to the First Tier Tribunal
If HMRC turns down your appeal, even after a review, you can ask for the appeal to be heard by the Finance and Tax Tribunals, First Tier Tribunal (Tax). This can be done at an oral hearing or on paper – but the taxpayer always has the right to appear and be heard. You can find out more about the First Tier Tribunal (Tax), and download an appeal form from the Gov.uk website.
