Lets break it down...
Missing a tax deadline or making an error can result in HMRC penalties, but having a “reasonable excuse” could save you from unnecessary costs. Late tax returns, late payments, and late filing penalties are among the most common reasons for HMRC appeals. Understanding what HMRC considers valid can make all the difference.
When you’ve taken reasonable care but still couldn’t meet your obligations, HMRC may accept your explanation. Their decision often hinges on whether your circumstances were genuinely beyond your control. Knowing what qualifies as a reasonable excuse significantly improves your chances of a successful appeal. Whether something is considered a reasonable excuse depends on the specific facts of each case.
Pie tax, the UK’s first personal tax app, helps you track deadlines and organise evidence for potential appeals. Or if you’re just here to get to grips with it all, let’s break it down! HMRC penalties can create significant challenges for both individuals and businesses, often leading to unexpected financial strain and added stress. These penalties are imposed when tax obligations, such as filing tax returns or paying taxes on time, are not met.
Understanding what counts as a reasonable excuse is essential if you find yourself facing HMRC penalties. A reasonable excuse is an unexpected or uncontrollable event that prevents you from meeting your tax obligations, even though you took reasonable care to comply. HMRC considers each case on its own merits, carefully reviewing the specific circumstances and the actions you took before, during, and after the event that led to the penalty.
What Counts as a Reasonable Excuse for HMRC?
A reasonable excuse is something that prevented you from meeting tax obligations despite taking reasonable care. It must be something that would have stopped any reasonable person from complying. Exceptional circumstances and unforeseen events, such as natural disasters or serious emergencies, are often considered a reasonable excuse.
HMRC evaluates whether your situation was truly outside your control. They consider if someone with similar responsibilities would have acted differently under the same circumstances.
Your excuse must directly connect to why you couldn’t file or pay on time. For instance, serious illness during the submission period creates a clear link to your inability to comply. Mental health and mental health conditions, as well as physical illness, can also be considered a reasonable excuse if they directly impact your ability to meet a specific obligation.
You must also provide supporting evidence for your claim and demonstrate that you resolved the issue promptly once the excuse ended. Unnecessary delays after your situation improved will weaken your case considerably.
Excuses HMRC Usually Accepts
Serious health issues typically qualify, especially hospital stays or severe illnesses affecting you or a close relative. HMRC recognises that medical emergencies can make tax compliance impossible.
Bereavement is generally accepted, particularly when it involves a close relative and occurs near the tax return deadline for a specific tax year. The emotional impact of losing someone close can reasonably prevent you from focusing on tax matters, and may justify a late tax return or late submission.
Technical failures on HMRC’s end almost always constitute a valid excuse. If their website crashed or systems were down when you attempted to file, save screenshots as evidence. Natural disasters or fires that destroyed records or prevented access to your premises typically qualify. These extraordinary events clearly prevent normal business operations and record-keeping.
Unexpected postal delays can sometimes be accepted when you can prove you posted with ample time. However, HMRC increasingly expects electronic filing for most submissions. If you have a valid reason for late filing or late submission of a tax return for a particular tax year, HMRC may excuse the delay.
Excuses That Probably Won't Work for Late Filing Penalties
“I didn’t have the money” rarely succeeds unless extraordinary circumstances caused your financial hardship. Simple cash flow problems or poor financial planning, including missing a payment deadline, won’t convince HMRC. Blaming your accountant or tax agent generally fails as HMRC considers tax compliance ultimately your responsibility.
Forgetfulness, ignorance of deadlines, or failing to seek advice won’t get you far. HMRC expects all taxpayers to know their obligations, important dates for submission and payment, and to take reasonable steps to avoid missing deadlines or payment deadlines. Failing to seek advice or take reasonable steps to prevent issues is not considered a valid excuse.
Minor illness like a cold or flu usually isn’t sufficient unless you can prove exceptional severity. HMRC expects reasonable people to have contingency plans for minor health issues. Computer problems at your end might not succeed unless truly catastrophic. Having backup plans for technology failures is considered part of reasonable tax management.
How to Submit Your Appeal
Act quickly as you normally have 30 days from the penalty notice date to appeal. Missing this deadline means needing a reasonable excuse for your late penalty appeal too! Use the specific appeal method mentioned in your penalty notice. You may need to submit an appeal form, either online or on paper. You can use your HMRC online account or government gateway account to file online, or send the appeal form by post if required.
I once missed a filing deadline after my laptop died the day before submission. HMRC rejected my first appeal because I hadn’t included proof of purchase for my replacement computer, showing exactly when it occurred. When I resubmitted with this evidence, they cancelled the penalty.
HMRC's online services allow you to appeal online and track the status of your penalty appeal through your online account. This makes it easier to manage your appeal and upload supporting documents. Explain clearly what happened, when it occurred, and how it prevented you from meeting your obligations. Be specific about dates and include a clear timeline of events.
Include all relevant evidence with your appeal. Medical issues need doctors’ notes; technical problems require screenshots or reference numbers from HMRC helpline calls. Keep your explanation straightforward and honest. Exaggerating your situation can backfire if HMRC investigates further or requests additional evidence. If you encounter problems with the appeal process or online services, contact HMRC for assistance.
Building Strong Evidence
Medical evidence should be official documentation from healthcare providers. Doctor’s notes, hospital admission papers, or prescription records all strengthen health-related claims.
If your excuse relates to mental health, supporting evidence from a mental health professional will strengthen your case. For bereavements, provide death certificates or funeral documentation. These establish both the timing and your relationship to the deceased person.
Technical issues need digital proof to be convincing. Screenshots showing error messages, emails about service outages, or HMRC service status announcements all help. You should also include the penalty explanation letter from HMRC as part of your evidence.
Postal problems require tracking information or proof of posting. This demonstrates you made reasonable efforts to comply with deadlines through appropriate channels. Keep a detailed diary of events relating to your excuse. Note dates, times, conversations, and actions taken, as this timeline can be crucial for your appeal’s success.
What Happens After You Appeal
HMRC aims to respond within 45 days, though complex cases may take longer. Your penalty might be suspended during their consideration of your case. If HMRC agrees with your appeal, they may cancel the tax penalty or financial penalties and confirm this in writing. Keep this confirmation safe in case questions arise about this penalty in future.
Sometimes HMRC might reduce rather than cancel penalties if they partially accept your excuse. Some penalties are penalty based and may depend on the amount of outstanding tax or your tax liability. Your compliance history may also influence their decision.
If you have outstanding tax, late payment penalties and HMRC may charge interest on the overdue amount, even if your appeal is being considered. If they reject your appeal, you have options. You can request a review by a different HMRC officer or escalate the case to the First-Tier Tribunal for an independent review.
Throughout the process, continue meeting your ongoing tax obligations. This prevents accumulating additional penalties while your appeal is being considered.
Final Thoughts
Success with HMRC reasonable excuse appeals comes down to three elements: honesty about what happened, evidence supporting your claims, and prompt action once obstacles were removed.
HMRC examines each case individually, so focus on explaining your specific situation clearly. Generic excuses without personal context rarely succeed. If your first attempt is unsuccessful, remember the review process and tax tribunal are available options. Many penalties are overturned at these later stages.
Pie tax: Simplifying Tax Appeals
Dealing with HMRC appeals can feel overwhelming, but with the right support, it doesn't have to be so stressful. Pie tax helps you stay ahead of potential issues. Our app sends timely reminders well before deadlines approach, significantly reducing your chances of needing to make a reasonable excuse claim at all.
We provide secure document storage for all your tax-related paperwork, making evidence collection straightforward if you ever need to appeal a penalty. Our built-in guidance explains what information HMRC requires for different situations, helping you stay compliant and minimising your risk of penalties. Want to see how we can help keep your tax affairs in order? Explore the Pie tax app today and take control of your tax compliance.
