What’s a “Reasonable Excuse” for a late tax return?

If the taxman tells you that you have to send a completed tax return then there are penalties for not sending in the Return on time.  The later the Tax Return is the higher the penalties.  But penalties are not due if you have a “Reasonable Excuse”.

The taxman takes a hard line and usually tries to reject most excuses.  However, the Tax Tribunals have laid down guidance which HMRC must follow.  So HMRC have published their views of when they think a reason for late filing might be accepted by them as a Reasonable Excuse:

  • an exceptional or unexpected event, beyond your control, that prevented you from sending your return on time. In this case, you must send your return as soon as possible once the problem ends;
  • documents lost through theft, fire or flood that can’t be replaced in time;
  • life-threatening illness, for example a heart attack that prevents you dealing with your tax affairs;
  • death of a partner shortly before the deadline;
  • industrial action by Royal Mail over a lengthy period of time;
  • issues with the online service, with no work-round – you’ll need to provide the error message received.

If you believe you have a reasonable excuse you can ask for a penalty to be reconsidered. You should tell HMRC as soon as possible – don’t wait until you receive the penalty.

If the taxman doesn’t agree you can apply for Internal Review or appeal to the Tax Tribunal.  The Tax Tribunal has generally been a bit more generous in its interpretation of Reasonable Excuse than the taxman; and in worthwhile cases it may be worth considering an appeal.

If you need advice and help in a contentious tax dispute call Paul Lynam now on 0845 643 9997

or Andrew Nutbrown on 07718 778710