New statistics obtained under a Freedom of Information request have revealed that HMRC cancelled over a third of the late-filing penalties levied in 2014 and 2015.
These figures arrive as HMRC send out the first of their annual reminders to prepare and submit your annual tax return. HMRC statistics show that 750,000 people (6.5%) missed the deadline for 2016/17. Anyone missing the deadline faces an immediate £100 penalty, whether or not they have tax to pay, and after three months you incur additional penalties of up to £10 per day.
The best solution is to file on time and avoid any penalties, but the large number of fines being cancelled suggests many people had a ‘reasonable excuse’ for HMRC. Some guidance on what qualifies as a reasonable excuse is available from Gov.uk, 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;
- you experienced service issues with HMRC online services;
- a fire, flood or theft prevented you from completing your tax return;
- there were postal delays that you couldn’t have predicted;
- you experienced delays related to a disability you have.
For more information on any of the above, please contact one of our tax team. There is no deadline, but the sooner you act, the easier next year’s tax return will be.