Filing an online tax return late – will your excuse stand up?

When you file an online return, Her Majesty’s Revenue and Customs (HMRC) expects you to do everything possible to meet the deadline and makes it quite clear that if you file a return late and you don’t have a ‘reasonable excuse’, you may have to pay a penalty. So what might HMRC generally consider to be a reasonable excuse?

Firstly you should assume that the HMRC expectation is that your intention is always to send your tax return as soon as you can. For a missed deadline, HMRC considers each case as unique and to be considered on its own merits. Your case and claim of a reasonable excuse will be undermined if it appears to be habitual, with a pattern of missed deadlines. The HMRC view seems to be that relief from a late submission penalty can only apply if the problem that actually prevented you from filing your return on time was totally unexpected, unusual, insurmountable and unlikely to be repeated!

Some examples of ‘reasonable excuses’ identified by HMRC are:

  • a failure in the HMRC computer system;
  • your computer breaks down just before, or during, the preparation of your online return;
  • a serious illness, disability or serious mental health condition has made you incapable of filing your tax return;
  • you registered for HMRC Online Services but didn’t get your Activation Code in time.

HMRC will not accept an excuse where you haven’t made a reasonable effort to meet the deadline and provides as examples of ‘unreasonable excuses’:

  • you found the online system too complicated to follow;
  • you left everything to your accountant to do and they let you down;
  • you forgot about the deadline;
  • you did not try to re-submit your return on time once a problem with the IT system was put right;
  • you registered for HMRC Online Services after the filing deadline (eg 31 January for Self Assessment).

HMRC says that it does not want to penalise customers who would have filed on time but were prevented from doing so by events beyond their control. For this reason, all reasonable excuse claims received will be considered. You must make your reasonable excuse claim in writing and send it to your HMRC Office. HMRC provides forms to help you make a Self Assessment, VAT or Corporation Tax reasonable excuse claim. Using these forms correctly will allow HMRC to consider your reasonable excuse claim more easily. The HMRC website provides more information about all of these issues.

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