What is a ‘Reasonable Excuse’?

Personal Tax,

Once the 5th April has passed each year, the majority of people have until the 31st January the next year to submit their Self Assessment Tax Return. This is a significant length of time, yet 750,000 people missed that deadline in 2018. The majority of these people will have received a penalty from HMRC for late submission.

What are the penalties?

The standard penalty for missing the deadline is an immediate £100 fine, which will be added to your online account if you have one. This is imposed whether there is tax to pay or not.

If you do no file within three months of the deadline, ie before the end of April, HMRC can charge an additional £10 per day for the next 90 days.

Further penalties will be imposed after six months and twelve months, which can be calculated on the amount of tax owed.

Interest will also be charged on the unpaid tax due.

HMRC’s definition of a ‘Reasonable Excuse’

In some cases, you can argue against penalties, if you have what HMRC class as a ‘Reasonable Excuse’. Their guidance list some examples:

  • 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
  • Service 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 you have

Each ‘Reasonable Excuse’ needs to have occurred in the period immediately before the deadline to apply and are not an immediate ‘free pass’. HMRC have been known to question why the preparation of the Return wasn’t completed earlier in the allowed period.

If you’re unable to prepare your Return, or submit your records to us to do that for you in good time, please let us know as soon as possible. Despite being a small firm, if there are extenuating circumstance we can flex our schedule to help.


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