How to save yourself a ₤100
fine for late filing
THE Low Incomes Tax Reform Group (LITRG) is urging
taxpayers who miss the Self Assessment filing deadline, on Tuesday, 31 January
2017, but who have a reasonable excuse for the delay, to appeal against
penalties for late filing.
LITRG supports HMRC's efforts to encourage people to file returns and pay Tax
due from them by the proper date. But the campaign group is concerned that some
of those who do not make the deadline may not appeal against sanctions for late
filing because they are not aware of their rights.
Anthony Thomas, LITRG Chairman, said:- "We are anxious that people may
feel somewhat panicked by penalty notices from HMRC and just pay financial
sanctions for filing Self Assessment forms late without considering that there
may be a perfectly good reason for the delay in filing that may make them
eligible for special treatment."
LITRG is reminding taxpayers that there could be extenuating circumstances where
someone may be able to avoid a penalty by claiming what HMRC define as a
'reasonable excuse' for filing their Tax return late. These could
include flooding or severe weather problems, but also life events such as
serious illness or bereavement, and other causes beyond the taxpayer's control.
It is important that even if a reasonable excuse is established, the taxpayer
files without unreasonable delay once the excuse has ceased. For example, if
illness prevented them from filing on time, they must file as soon as reasonably
practicable when they recover from their illness. It may be that a combination
of reasons, rather than a single reason, together may constitute a reasonable
excuse. In all cases full details must be sent to HMRC.
An online copy of the form that may be submitted with a late Tax return,
claiming reasonable excuse, can be found on the GOV.UK website. If someone has
received a penalty notice, an appeal notice will usually accompany it, but, if
not, the appeal notice can be downloaded from the GOV.UK website. People can
also send in a letter to make an appeal.
Separately from late filing penalties, HMRC may also charge a penalty if a
taxpayer submits an inaccurate return to HMRC which results in them understating
their liability to Tax or claiming too much by way of loss relief or repayment
of tax. It typically amounts to 15% of the Tax understated. For a penalty to be
properly chargeable, the mistake must be 'careless' or deliberate.
'Careless' indicates they have failed to take reasonable care, but what
constitutes 'reasonable' care depends on the individual's
particular circumstances and abilities. For example, a mistake which may be
deemed reasonable for a pensioner with no prior knowledge of the Tax system may
not be thought reasonable if perpetrated by a qualified lawyer or accountant.
If a mistake is not careless but a genuine error made while exercising
reasonable care, HMRC is not entitled to charge a penalty at all. This is the
case even if their Tax liability is understated as a result of the error.
Anthony Thomas said:- "It is important that people are aware of their
rights and duties. If someone who is charged a penalty for inaccuracy in their
return believes their mistake was not careless as defined by HMRC, but an honest
mistake despite taking reasonable care, then they should appeal against the