When Can You Appeal a Tax Penalty?

You should cite a reasonable excuse when you appeal a tax penalty, in order for your application to prove successful. With this in mind, Prestige Tax and Trust Services asks; when can you appeal a tax penalty?

Appealing a penalty

In some cases, HM Revenue and Customs (HMRC) – the government body that oversees taxations – may issue you a penalty if they believe you’ve acted inappropriately in tax matters. You have the right to appeal this decision, yet you’re only likely to be successful if you can cite a reasonable excuse in your application to overturn the penalty.

Reasonable excuses

Under UK law, you can appeal a tax penalty if you have a reasonable excuse as to why your tax return or payment was late. This refers to a reason why something unexpected/out of your control prevented you from meeting your tax obligation. Reasons you can cite include:

  • If you encountered postal delays you could never have foreseen, preventing you from sending a postal tax return/payment.
  • If issues arose when you used HMRC’s online services.
  • If your computer/software failed immediately before, or during the period when you were preparing your tax return online.
  • If a fire stopped you from completing your tax return form.
  • If you were forced to stay in hospital unexpectedly, so you couldn’t handle your tax affairs during the appropriate time frame.
  • If your spouse/partner died shortly before the deadline for your tax return/payment.

Unacceptable excuses

Conversely, HMRC has also provided a list of reasons that they won’t accept as reasonable excuses when you appeal a tax penalty. This includes:

  • If you didn’t receive a reminder of your tax return/payment deadlines from HMRC.
  • If you found that it was too difficult to use HMRC’s online system.
  • If your payment failed e.g. your cheque bounced, because you didn’t have enough money in your bank account to meet your tax payment.
  • If you asked someone else to send your tax return to HMRC and they failed to do so.

We should also take a minute to discuss what happens if you receive a tax penalty for sending a tax return/payment late and you have a disability. In this instance, cite a reasonable excuse when you claim and HMRC will consider whether you made a reasonable effort to meet your obligation within the appropriate time frame.

Prestige Tax and Trust Services

If you wish to avoid tax penalties, the best thing to do is to employ a specialist service to ensure that you have the information you need to meet all of your tax obligations. The team here at Prestige Tax and Trust Services has a wealth of experience in matters related to tax, so you can be sure that when you come to us, your tax affairs will be handled professionally and efficiently.

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