Tax Planning: How To Appeal Against A Late Tax Filing Penalty

Posted by D&V Philippines
Jun 17, 2015
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late_tax_appeal.jpgThe late filing of a tax return can have costly consequences. Penalties for tax returns for the tax year 5 April 2015 will start to accrue from 31 October 2015 for paper returns, and 31 January 2016 for online returns.

The tax penalty also rises when you owe a higher amount of unfiled tax. If you have been charged with late filing penalties, you have the option to appeal against a late filing penalty.

Selecting the Right Forms

The handwritten appeal may be accomplished using the SA 370 (Self-assessment: appeal against penalties for late filing and late payment) tax form. For partnership late filing penalty appeals, use SA 371 (Self-assessment: Partnership Tax Return appeal against late filing penalties) instead.

Making an Appeal

Before making your appeal against the late tax filing penalties, you must file your tax return first—HMRC expects you to send the tax return as soon as you can, specifically within 14 days of the end of the circumstances which caused you to file late. You can proceed to make your appeal to HMRC thereafter, which should be made within 30 days of the penalty notice issued. HMRC considers late appeals, but if they did not allow yours, you can apply to the Tax Tribunal to have it accepted.

In the event that HMRC rejects your appeal, you can ask the HMRC to review the decision—in this case, a different HMRC official will be the one reviewing your case. You can also attempt to negotiate with HMRC to reduce the penalty if your reason is deemed acceptable.


Filing Late: Acceptable Reasons based on HMRC Standards

The penalty may be cancelled if you have what the HMRC considers to be a 'reasonable excuse', which is 'something unexpected or outside your control that kept you from meeting your tax obligations. Some of these circumstances are:

  • Death of your partner occurring shortly before the tax payment or return deadline.
  • Unexpected stay in the hospital, which prevented you from being able to accomplish tax filing.
  • Hardware or software issues that occurred in your computer while you were filing your return online.
  • Technical problems in HMRC's online services which delayed or prevented you from filing your tax returns.
  • Fire and natural disasters such as earthquakes, which prevented you from taking care of your tax obligation.
  • Unexpected postal delays.
  • Carefully explain your situation and make sure to include every detail without tampering the truth when making your appeal, so you won’t get in trouble. You can always enlist the help of a tax professional to strategise your next move.
Get all the help you need on filing tax returns by consulting with D&V Philippines' experienced finance and accounting professionals. Ask for a quotation.
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