It goes without saying that filing your tax return on or before the 31st January (or 28th February for 2021) deadline date, is important, and you should expect to be penalised by HMRC if you fail to meet this deadline. The only ‘get out of jail card’ is if you have a genuine ‘reasonable excuse’.
It goes without saying that HMRC won’t accept just any excuse, such as poor memory, epitomised by; ‘Sorry, but I just forgot to do it’ or ‘I forgot when the filing deadline was’.
What are Reasonable excuses?
It might be helpful to start with a few examples of excuses that have in the past, been accepted by HMRC as being reasonable. The underlying principle is that an unusual event, beyond your control, has prevented you from filing your tax return. For example:
- An HMRC online systems failure
- The death of a partner or close relative during the immediate period before the deadline
- Serious illness, disability and/or serious mental health condition
- A computer failure or major software malfunction
- Registering with HMRC in time but not receiving your activation code
- Your residence/place of work fell victim to fire, theft or flooding
- You have proof of posting your return, but the Post Office failed to deliver it on time
The above list and variations thereof, covers over 80% of all reasonable excuse claims that were successful in overturning the statutory HMRC penalty.
As you might expect, HMRC will not accept a claim if they consider your excuse for missing the deadline to be an unreasonable one. The three most common excuses that have been tried (and failed!) are:
- I found the whole process too confusing.
- I thought my accountant was doing it.
- I don’t have any tax to pay so didn’t think it mattered.
So, if you consider that you have a valid and reasonable excuse for the late submission of your tax return, you should contact HMRC as soon as possible. This is done by completing a reasonable excuse claim form at: https://www.gov.uk/tax-appeals/reasonable-excuses and the very best of luck to you!
Inventive unreasonable excuses
Regular readers of my blog will know that each year HMRC publishes a list of rejected excuses that fall into the category of the weird and the wonderful, with some truly imaginative in their inventiveness. So, here’s this year’s selection of the most original and creative excuses so far:
- I was camping on Helvellyn in the Lake District and couldn’t find a postbox or get an internet signal
- I’m not a paperwork orientated person, I have always relied on my brother to complete my returns, but we fell out over Christmas and we’re not on speaking terms now
- My niece had moved in and made the house so untidy I couldn’t find my log in details to complete my return online
- My accountant went to Tenerife on holiday and decided to stay there
- My dog defecated on my tax return and I’ve been too embarrassed to ask for a replacement
- I had an unfortunate experience with a herd of sheep and now can’t type or write
- I’ve been travelling the world, trying to escape from a foreign intelligence agency
- I was helping my 9 year-old daughter with a craft project for Brownies and accidentally glued my tax return to the collage she was making
- My wife’s migraine went on for days and then she gave it to me
- I crashed my car into a gate last week and have been too traumatised to do anything since
Andy finally my personal favourite; My hamster’s libido is so enormous, he tries to have sex with anything, including my computer.
But, on a more serious note
Around 12 million people are expected to complete a tax return this year by the deadline date and those who don’t will face a late £100 penalty, as did everyone in the above list. As taxpayers will have had at least 10 months in which to file their tax returns, HMRC do not look kindly on taxpayers who miss the tax return deadline without a valid reason. Penalties: –
- An initial £100 fixed penalty, which applies even if there is no tax to pay
- After 3 months, additional daily penalties of £10 per day, up to a maximum of £900
- After 6 months, a further penalty of 5 percent of the tax due or £300, whichever is greater
- After 12 months, another 5 percent or £300 charge, whichever is greater
- There are additional penalties for paying your tax bill late of 5% of the tax unpaid at 30 days, 6 months & 12 months, plus statutory interest compounded daily
As ever, if you would like more detailed information on some aspect of UK Tax, send me an e-mail and I’ll be pleased to advise further.