What is Considered a Reasonable Excuse?
You can appeal against some penalties if you have a reasonable excuse, for example for your return or payment being late.
What may count as a reasonable excuse
HMRC considers this to be something that stopped you from meeting a tax obligation that you took reasonable care to meet, for example:
- 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 HM Revenue and Customs (HMRC) online services
- a fire, flood or theft prevented you from completing your tax return
- postal delays that you could not have predicted
- delays related to a disability you have
You must send your return or payment as soon as possible after your situation is resolved, as well as pay any outstanding tax.
If you’re affected by coronavirus (COVID-19)
HMRC may consider COVID-19 as a reasonable excuse for missing some tax obligations (such as payments or filing dates).
Explain how you were affected by COVID-19 in your appeal. You must still make the return or payment as soon as you can.
What is not an excuse for late tax returns?
HMRC says that the following will not be accepted as an excuse:
- you relied on someone else to send your return and they did not
- your cheque bounced or payment failed because you did not have enough money
- you found the HMRC online system too difficult to use
- you did not get a reminder from HMRC
- you made a mistake on your tax return
In 2022 HMRC is waiving the late penalty for tax returns that are filed after 31 January 2022 but before 28 February 2022. There will still be interest charged on the tax due if you pay your tax late, but for the second year in a row, HMRC has offered a reprieve to stressed-out self-employed people.
What’s interesting is that HMRC won’t be sympathetic to you if you find filing your tax return online tricky. As we all know, when you’re self-employed you’re expected to wear many many hats – including becoming your own finance department. Filing tax returns is just another part of that.
For that reason, many self-employed people (wisely!) choose to use an accountant to file their returns in the hope of avoiding penalties. But what if your accountant files it late and it’s genuinely not your fault? We’ve heard stories of accountants sitting on work for over 6 months before they file their client’s income tax with HMRC. That’s most of a tax year!
Well, HMRC says that your accountant filing late is not a good enough excuse to have any penalties waived. So to avoid penalties, make sure you always use a reputable accountant!
Pay your Income Tax
Once your tax return is filed you’ll need to pay your income tax.
The easiest way to pay your income tax is online. You can pay your income tax in a variety of different ways on the HMRC site – https://www.gov.uk/pay-self-assessment-tax-bill
Because of coronavirus (COVID-19) you’ll not get a late filing penalty as long as you submit your online return by 28 February 2022.
You’ll not get a late payment penalty if you pay your tax in full or enter into a payment plan by 1 April 2022.
You will however still be charged interest from 1 February 2022 if you pay after the Self Assessment tax deadline of 31 January 2022.