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You might be able to appeal an HMRC self-assessment penalty to give yourself time to pay it, get it reduced or even removed.
But whether it is expected or unexpected, receiving a self-assessment penalty can be the cause of much anxiety.
Why Has HMRC Sent You a Self-Assessment Penalty?
The first step to appealing a self-assessment penalty is to establish why it has been sent.
Usually, HMRC will have sent you a letter with details of why they have issued a penalty. The two most common reasons for HMRC issuing penalties are:
- Missing the filing deadline for sending in your self-assessment tax return;
- Late payment of income tax and national insurance.
If you are struggling to understand why HMRC have issued you a penalty, then give them a call on 0300 200 3310. Remember to have your National Insurance and UTR numbers ready, so you can pass security.
Don’t ignore the penalty either, they increase over time. So you should deal with it sooner rather than later to minimise the penalties you pay, should you appeal fail.
You may even want to pay your penalty while you appeal to help reduce any further interest and charges.
When to Appeal a Self-Assessment Penalty
You must appeal a self-assessment penalty within 30 days of the date HMRC sent you the penalty.
If you have missed the 30-day deadline, then you can try to explain the reason for the delay to get your case considered.
How to Appeal an HMRC Penalty
As part of your appeal, you’ll need to show that you have a reasonable excuse for missing the deadline or failing to pay your taxes on time.
What is a Reasonable Excuse for an HMRC Appeal?
What HMRC considers reasonable excuse is fairly prescriptive! So even if your reasons appear reasonable to you, they may not agree and dismiss your appeal.
Here are some typical reasonable excuses for missing the self-assessment deadlines that HMRC will accept:
- your partner or close relative died shortly before the tax return or payment deadline;
- you had an unexpected stay in hospital;
- 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.
What Doesn’t Count as a Reasonable Excuse?
HMRC does not consider the following acceptable reasonable excuses:
- you relied on someone else to complete your self-assessment tax return, but they let you down;
- your payment for taxes failed because you had insufficient funds;
- you couldn’t use the online system;
- you didn’t receive any reminders from HMRC;
- you made a mistake on your self-assessment tax return.
Appealing a Self-Assessment Penalty
Once you are sure you have a reasonable excuse, there are different ways you can appeal the penalty depending on the reason it was issued.
If you have received a £100 penalty for late filing of your self-assessment tax return then you can go online to appeal. You’ll need to login into your government gateway account to start your appeal, so you’ll need your HMRC User ID and Password.
HMRC on 0300 200 3310. They will discuss your appeal with you and tell you if they need you to send any information they need to make a decision.
You can appeal by post. You’ll need to print and complete a form SA370.
An SA370 contains details of your penalty that you are appealing as well as your reasonable excuse. It’ll help to have the following information ready before you start filling out the form:
- the date the penalty was issued
- the date you filed your Self Assessment tax return (if you’ve filed it)
- details of your reasonable excuse for late filing
Once you have completed the SA370 form you’ll need to print and post it to:
HM Revenue and Customs,
How Do You Find Out If Your Appeal Was Successful?
HMRC will write to you to let you know the outcome of your appeal.
If your self-assessment appeal has been successful HMRC will adjust your account for any penalties and interest that have been removed.
If your appeal is rejected, HMRC will write to you to say why they have made their decision. You should pay the penalties and interest at this point.
If you are struggling to pay any outstanding self-assessment penalties and interest then you can:
- Contact HMRC to set up a payment plan with them;
- Appeal again, within 30 days (just remember penalties and interest will continue to grow during the time of your appeal).
Anita is a Chartered Accountant with over a decade of experience taking self-employed business owners from financially confused to business savvy.
She is the creator of the ‘Go Self Employed’ website, which is her corner on the internet where she makes self-employment less terrifying.