Don’t panic about penalties

If you receive a late filing penalty from HMRC, there is a one in three chance that it is wrong, and you can get it cancelled.

We know that HMRC cancels more than a third of the penalties it issues each year; it says this is because the taxpayer has successfully claimed a reasonable excuse for late filing. However, a high proportion of the late filing penalties are issued incorrectly as the tax return was actually submitted by the set deadline.

We are expecting the HMRC computer to issue a large number of late filing penalties automatically for last year’s tax returns, as lots of paper returns were submitted after the paper filing deadline of 31 October 2017. These paper returns were necessary because the electronic route was blocked by HMRC’s computer, which couldn’t cope with ‘unusual’ combinations of income and allowances for the 2016/17 tax year.

Taxpayers who were forced to submit ‘late’ paper returns will have a reasonable excuse, but that has to be claimed, either with the return or by appealing against the automatic penalty.

We can help you submit an appeal against any late filing penalty you receive from HMRC.