HMRC Late Filing Penalty: Full Appeal Guide 2024
HMRC Late Filing Penalty: Full Appeal Guide
HMRC issues automatic penalties for late filing and payment. They are designed to encourage compliance — not to destroy people. The appeals process exists precisely because HMRC knows blanket penalties catch genuine cases.
The penalty structure (Self Assessment)
- Day 1 late: £100 automatic penalty
- 3 months late: Additional £10/day (up to £900)
- 6 months late: 5% of tax due or £300 (whichever is higher)
- 12 months late: Further 5% or £300
"Reasonable excuse" — your magic words
HMRC will cancel a penalty if you have a "reasonable excuse" for the failure. The legislation (TMA 1970 s.118(2)) doesn't define reasonable excuse, so it's interpreted broadly.
What HMRC accepts as reasonable excuse:
- Serious illness (you or a close family member)
- Death of a close relative shortly before the deadline
- Unexpected hospital stay
- Computer failure or software problem (with evidence)
- HMRC's own system failures
- Fire, flood, or other disaster
- Postal failure (for paper returns — with evidence)
- Mental health crisis
What HMRC doesn't accept:
- "I didn't know about Self Assessment"
- "My accountant forgot" (though you can argue your accountant let you down)
- Cash flow problems (for payment penalties — different rules)
- Relying on someone else who didn't do it (without more)
The appeal process
1. Within 30 days of the penalty notice: Appeal online via your HMRC account, by phone, or in writing. State your reasonable excuse clearly.
2. HMRC's review stage: If HMRC rejects your appeal, ask for an internal review. Different HMRC officer considers it fresh.
3. First-tier Tax Tribunal: Free to apply. Independent tribunal. HMRC loses many cases here — particularly where the reasonable excuse argument is well-made and the taxpayer has no history of non-compliance.
Special dispensation periods
HMRC has run several COVID-related dispensations and system-related waivers. Always check whether your penalty period was covered by any HMRC announcement of suspended enforcement.
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