Late Filing Penalties for Personal Tax Returns.

There was some good news recently from HMRC about their stance on late filing penalties for personal tax returns. Many taxpayers are hit by late filing penalties every year because their tax return has been filed after the January 31st deadline for submitting the tax return for the previous year. It has always been possible to claim what HMRC call a ‘reasonable excuse’ and have the penalty overturned. However, most people discover that HMRC does not have a particularly sympathetic view of what a reasonable excuse is and end up being disappointed. So, what has changed now? Well, the reality is that HMRC just does not have the resources to go through every excuse claim in detail so it has decided to accept the claim for a reasonble excuse provided the following conditions are met:

• that the penalty relates to the 2013/14 self assessment tax return and not to any other year or any other taxes
• the 2013/14 return must have now been received by HMRC
• the tax due for 2013/14 must have now been paid

So if you submitted your appeal by the appropriate deadline with a reasonable excuse for lateness you should get your late filing penalty cancelled. As the deadline is 30 days the time has now gone to make any new appeal unless you are prepared to accept the cost and hassle of persuing the claim up to the first tier tribunal which seems unlikely for a £100 fine.

HMRC have also extended the scope of what consistitutes reasonable excuse to include:

• problems with HMRC online services
• failure of your own computer or internet
• delays with the post

So, it’s a concession, but not a very useful one if you haven’t appealed yet and arguably not a very fair one if you have been fined for earlier years. We are told that the easing of the penalty regime will also apply to RTI (payroll) penalties but are stillwaiting for more details on this.