HMRC penalties: do you have a 'reasonable excuse' for missing the Self Assessment deadline?
It might not surprise you to learn that not everyone manages to file their Self Assessment tax return on time. In fact, HMRC estimates that around a million or so small business owners fail to meet the deadline each year. If you reckon you’ll be one of them this time, you might be wondering if there’s any way that you can avoid paying the automatic £100 penalty that HMRC imposes for late filing.
Well, the good news is that there are some exceptions, as HMRC says it will accept 'reasonable' excuses for missing the deadline. However, if your reason is along the lines of “I was too busy” or “my goldfish died” - both of which are actual excuses that have been submitted to HMRC - it shouldn’t come as a surprise to find out that these won't enable you to bypass a fine.
What counts as a reasonable excuse?
According to HMRC, a 'reasonable excuse' is “when some unforeseeable or unusual event beyond your control has prevented you from filing your return on time”. They highlight potential occasions such as the following as fitting this criteria:
- When there’s a failure in the HMRC computer system that prevents you from filing
- When your computer breaks down just before or during the preparation of your online return
- When you have a serious illness, disability or serious mental health condition that makes you incapable of filing your tax return
- When you have registered for HMRC Online Services but didn't get your Activation Code in time to submit your tax return before the deadline.
Other excuses accepted in the past include when important documents have been lost, through theft, fire or flood, and can’t be replaced before the Self Assessment deadline passes.
How likely is it that HMRC will accept your excuse?
The examples above only apply if they actually prevented you from filing your return on time when you otherwise would have done, and that HMRC are unlikely to be lenient if they believe that you are at fault for missing the deadline. It’s therefore advisable to not only show proof of your situation to them, but also demonstrate that you have made some effort to overcome the problems, as HMRC will review each case on merit to decide whether it is a 'reasonable' excuse or not.
If in doubt, speak to your accountant and get their advice on whether you have a valid excuse for missing the filing deadline or not, or contact HMRC directly to explain your circumstances.
Just be prepared for the bad news that your excuse isn’t acceptable, and have £100 ready to pay the fine as soon as possible so you don’t face any additional penalties down the line.
The best way to avoid a fine is simply to file your tax return on time. Why not take a 30-day free trial of FreeAgent to see how our Self Assessment software can help you get sorted before the deadline?
Disclaimer: The content included in this guide is based on our understanding of tax law at the time of publication. It may be subject to change and may not be applicable to your circumstances, so should not be relied upon. You are responsible for complying with tax law and should seek independent advice if you require further information about the content included in this guide. If you don't have an accountant, take a look at our directory to find a FreeAgent Practice Partner based in your local area.