We are sharing this update from ACCA, our professional body, for the interest of clients and contacts. The content is (c) ACCA
An exploration of ‘reasonable excuses’ for appealing against late filing penalties
There is no statutory definition of reasonable excuse, which ‘is a matter to be considered in the light of all the circumstances of the particular case’.
HMRC considers reasonable excuse as something that stops a person from meeting a tax obligation despite them having taken reasonable care to meet that obligation. It is necessary to consider what a reasonable person, who wanted to meet their obligation, would have done in the same circumstances and decide if the action of the person met that standard.
As explained within this article, penalties for late filing of returns and paperwork or late payment differ according to which tax you are dealing with. When appealing, HMRC does not require supporting evidence to be submitted with any claim but may later ask for evidence.
HMRC provides the following reasonable excuse examples within the guidance:
- ‘your partner or another close relative died shortly before the tax return or payment deadline
- you had an unexpected stay in hospital that prevented you from dealing with your tax affairs
- you had a serious or life-threatening illness
- your computer or software failed just before or while you were preparing your online return
- issues with HMRC online services
- a fire, flood or theft prevented you from completing your tax return
- postal delays that you couldn’t have predicted
- delays related to a disability or mental illness you have
- you were unaware of or misunderstood your legal obligation
- you relied on someone else to send your return, and they did not.’
For those who prefer practical, real-life examples for a better understanding of what does not constitute a reasonable excuse, HMRC published its list of the funniest and most bizarre excuses for late tax returns, which include:
- ‘My husband told me the deadline was 31 March, and I believed him’
- ‘After seeing a volcanic eruption on the news, I couldn’t concentrate on anything else’
- ‘Our business doesn’t really do anything.’
How to submit an appeal
You must send your return or payment as soon as you’re able to. You should use form SA370, Self-Assessment: appeal against penalties for late filing and late payment, when making an appeal. Appeal the penalty as soon as possible after it is issued to you, including as much information as possible about all the reasons for late filing. You normally have 30 days to make an appeal to HMRC. This is 30 days from the date printed on HMRC’s decision notice, and not 30 days from the date you receive it.
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