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HMRC internal manual

Self Assessment Manual

From
HM Revenue & Customs
Updated
, see all updates

Interest, penalties and surcharge: penalties: appeals against late filing penalties

General

There are three different types of penalties that can be charged if a return is outstanding after the return due date or is filed late. These are

  • Late filing fixed penalty (see SAM61220)
  • Daily penalties (see SAM61230)
  • Late filing (tax geared) penalty (see SAM61240)

Customers may appeal against any late filing penalty on the grounds that there was a reasonable excuse for the late submission of the return.

Where you receive information or an appeal that the customer has died, for action to take see SAM61270. If you receive an appeal for any other reason, see business area ‘Appeals’ at SAM10000 onwards for further information.

The customer has 37 days from the date the penalty was imposed, as shown on the SA record, in which to appeal against a filing penalty. The statutory appeal period is 30 days from the date of issue of the notice of penalty assessment but a further seven days is allowed for printing and despatch of the notice. Where a late appeal is received, see business area Appeals at SAM10000 onwards for further information.

An appeal received against a particular penalty does not carry forward to a different penalty. This is a separate event and a separate appeal must be made.

Appeals must be recorded on the customer record and the penalty charge must be informally stood over. The business area ‘Appeals’ provides further information on how to handle and record appeals.

Advice on the action to take to deal with an appeal is available as a standard process description - see the Late filing Combined Penalty Appeals for 2010-2011 onwards for Individuals and Partnerships.

Appeals on the grounds of ‘reasonable excuse’

SA370 (notes) and SA371 (notes) provide guidance to customers on what is likely to be accepted as a valid reasonable excuse. More information about reasonable excuse can be found under subject ‘Reasonable excuse’ at SAM10090.

In law, the customer is not required to pay a penalty before an appeal against the assessment of the penalty is determined, so you should informally stand over the penalty immediately the appeal is logged. Note: The fact that a penalty is informally stood over will not stop other penalties being charged.

The office dealing with the appeal should consider the appeal critically on the grounds of reasonable excuse and take one of the following actions

  • Allow the appeal
  • Resist the appeal

Or

  • Refer the case to the Debt Management and Banking Interest Review Unit (IRU) (This content has been withheld because of exemptions in the Freedom of Information Act 2000) for advice. Note: This form is to be used for tax years 2010-11 onwards

HMRC has discretion to reduce a penalty because of special circumstances. This discretion can only be considered if there was no reasonable excuse for the failure to pay on time. You should consider ‘special reduction’ if you decide not to allow the appeal. For guidance on ‘special reduction’, see CH170000.

Notes:

1. Consideration of an appeal against filing penalties should be based solely on the existence, or otherwise, of a reasonable excuse
   
2. You will need to take particular care when dealing with an appeal against late filing penalties where the return has still not been filed
3. Where the date of receipt of the paper return is disputed, you may need to contact the office responsible for the batch where the paper return was captured, to check the date of receipt stamped on the return.

 

Where an appeal is received and the return has not been filed

 

  • Resist the appeal
  • Advise the customer that you cannot deal with the appeal until the return is filed

Appeals against penalties in partnership cases

Appeals against penalties in partnership cases should be made by the representative partner and dealt with through the partnership record. Further guidance is available at EM7350 and CH84700.

If you receive an appeal against a late filing penalty on a partnership try to settle it immediately. If you cannot, take the following action

1. Record the appeal on the partnership record. Use the date the penalty was imposed as the charge creation date. To find this you may have to view one of the partners records
   
2. Informally standover the relevant (partnership) penalty in full on each partners record. Note: There may also be a similar penalty for the late filing of the partner’s individual return which should be dealt with separately
3. Note the item which will appear on the Review Informal Standover work list (W019) ‘Working with Partnership’, the responsible office and UTR
4. Deal with the appeal

Online filing

Usually returns that are filed online are validated at the time of filing. The customer receives confirmation of successful filing, or an error message, almost immediately. But there are occasions where this does not happen and you should look at any appeal against a late filing penalty on its own merits.

If a customer or agent states that

  • A return was filed online on or before 31 January

And

  • They suffered a delay in receipt of an error message

And

  • A late filing fixed penalty has been charged

send details of the appeal, by email, to ‘Appeals and Penalties, Self Assessment Online, (HMRC Digital Services)’ (This content has been withheld because of exemptions in the Freedom of Information Act 2000) .

You may need to consider whether the case is, or has been, on work list W024 ‘Duplicate returns logged’, (see SAM71102), W055 ‘Filed Online amendments’ (see SAM71159) or W056 ‘Partnership Online amendments’ (SAM71160), as this could impact on how you deal with the appeal. If the case was on the work list and has been dealt with, review SA Notes to see what actions have been taken.