Appeal against HMRC penalty

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Table of Contents

What are the types of HMRC penalties?

You can receive HMRC penalty in one of the following most common scenarios; 

  • Late filing of a return
  • Late payment of your tax bill
  • Inaccuracies on return 
  • Failure to keep adequate records 

How & when to appeal against HMRC penalty?

Under most circumstances, appeal against the HMRC penalty is submitted by letter within 30 days the the penalty letter is dated. You must have a “reasonable excuse” in order to appeal against HMRC penalty.  

What is a reasonable excuse for HMRC penalty appeal?

HMRC takes a very strict view on reasonable excuse to be used in appeal against penalty. Their view on reasonable excuse can be found here. You can appeal on reasonable excuse basis, if one of the following is/was applicable to you;

  • If you lost your partner or other close family member just before the filing/payment deadline
  • you were hospitalised due to a severe or life threatening illness
  •  Your computer/software crashed
  • Technical glitches with HMRC online service
  • Fire, flood or theft
  • postal delays
  • delays related to “your” disability


What does not count as reasonable excuse? 

The following would not count as “reasonable excuse” in appealing against the HMRC penalty;

  • You engaged someone to take care of your returns/payment (like accountant) and they did not fulfil their responsibility 
  • your payment failed
  • you could not understand the HMRC online system
  • You did not get any notification from HMRC reminding you of your filing/payment obligation
  • You made an error on the return 

Who deals with the appeals against HMRC penalty?

When an appeal is made against the HMRC penalty, it is dealt with by a HMRC tax officer, who was not involved in the original penalty decision of HMRC. For certain taxes, like VAT, appeal can be filed directly to Tax tribunal. 

What if appeal against HMRC penalty gets rejected?

Where your appeal against the HMRC penalty does not result in your favour, you have the following 2 options;

  1. Appeal to Tax Tribunal: You can further appeal to the tax tribunal. The tax tribunal is an independent body which will seek information from both sides, i-e from you/taxpayer as well as from HMRC and will make its own evaluations to arrive at decision. Should you wish to take the HMRC to tribunal, you must do so within 30 days of the HMRC decision on your appeal. 
  2. Alternative Dispute Resolution (ADR): You may consider this route, if don’t believe you are making any progress with HMRC. Normally, businesses take this route, however, it is open for individuals too for their self assessment penalties. 


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Related Blogs:

Get further information from the following blogs;

Self Assessment Payment plan

Changes to Self Employed Grant