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What is a 'reasonable' excuse for a late tax return?

HM Revenue and Customs has reportedly waived a £100 fine for people who have a "reasonable" excuse for filing their tax returns late.

Its website states that a reasonable excuse for missing the deadline is "normally something unexpected or outside your control that stopped you meeting a tax obligation" and includes:

  • The recent death of a partner
  • An unexpected stay in hospital
  • Computer failures
  • Service issues with the tax authority's online services
  • A fire which prevented the completion of a tax return
  • Postal delays

HMRC waives late tax return £100 fine

Credit: PA

People who filed late tax returns have been let off a £100 fine for missing the deadline, it has been reported.

Her Majesty's Revenue and Customs (HMRC) has waived the penalty for those who provided a "reasonable" excuse for being late, according to the Daily Telegraph.

An internal memo leaked to the newspaper revealed that HMRC staff were asked to write off the fine without further investigation for individuals who could show mitigating circumstances, and who appealed after paying their tax bill.

The January 31 deadline for completing tax self-assessment forms was reportedly missed by 890,000 people.

A HMRC spokesman told the Telegraph: "We want to focus more and more of our resources on investigating major tax avoidance and evasion rather than penalising ordinary people who are trying to do the right thing."


Millions face paying back HMRC after tax errors

Millions of people face having to hand money back to HMRC after errors meant they ended up paying the wrong amount of tax on their earnings.

It is estimated that 5.5 million people have paid the wrong amount of tax, with 3.5 million thought to have paid too little and the remaining 2 million having overpaid, meaning they can claim a refund.

The mistakes can occur due to a change in personal circumstances, such as if a person moves jobs or starts receiving benefits.

Millions of people face having to repay money to HMRC because of errors calculating their tax. Credit: Gareth Fuller/PA Wire

According to tax officials cited by the Daily Telegraph, the average size of the error is about £300.

This is despite the introduction of a new £270 million 'Real Time Payments' scheme designed to make the tax system more accurate by letting people update their information on a weekly or monthly basis.

HMRC taking a 'computer says yes' approach to tax

Mike Down, of accountancy firm Baker Tilly, said the HM Revenue & Customs (HMRC) should be checking tax returns to see whether individuals had already explained their circumstances.

He told the Daily Telegraph that The Revenue is "adopting a computer says yes approach, rather than simply checking the tax returns".

One case involved an elderly widow whose effective tax rate was low because she was giving more than half her income to charity.

More: HMRC accused of 'bully boy tactics'

HMRC forms a 'trial to help people with mistakes'

The HM Revenue & Customs who have been accused of "bully boy tactics" for sending high earners letters ask why they are not paying more tax, have responded to the claims.

An HMRC spokeswoman said:

We are issuing 1,000 letters to taxpayers with an income of £150,000 or more who have an effective rate of tax of 22% or less.

If a taxpayer is content that their return is accurate then they do not need to do anything.

This is part of a trial to help individuals identify any mistakes they may have made on their Self Assessment return.

Anyone who needs help is welcome to get in touch with us.


HMRC accused of 'bully boy tactics' over tax letters

The HM Revenue & Customs has been accused of "bully boy tactics" for sending high earners letters asking why they are not paying more tax.

Around 1,000 letters have been issued to people who have an income of more than £150,000 but are paying less than 22% in tax.

HM Revenue & Customs forms were sent to everyone earning over £150,000. Credit: Rui Vieira/PA Wire

The letters state: "We can see from your Self Assessment tax return... that your effective rate of tax is lower than the average for people in your income bracket.

"There may be reasons why your effective rate of tax is correct. But it could mean that there is something wrong with your self assessment."


HMRC 'committed' to safeguarding confidentiality

HM Revenue and Customs remains committed to safeguarding taxpayer confidentiality, a spokesman has said, after reported plans to share taxpayers' data with third parties.

HM Revenue and Customs defends potential plans over data sharing Credit: PA

An HMRC spokesman said: "No final decisions have been taken [...] HMRC would only share data where this would generate clear public benefits, and where there are robust safeguards in place.

"Those accessing data would be subject to the same confidentiality provisions as HMRC staff, including a criminal sanction for unlawful disclosure of taxpayer information.

"HMRC will be consulting further and will ask for views on whether to charge to cover the costs of processing and providing anonymised data. This would not be charging for the data itself, purely covering the costs of providing it."

HMRC reported data sharing 'not the way to build trust'

The deputy director of Big Brother Watch has condemned reported plans for HM Revenue and Customs to share taxpayers' data with private firms. Emma Carr said:

Given the huge uproar about similar plans for medical records, you would have hoped HRMC would have learned that trying to sneak plans like this under the radar is not the way to build trust or develop good policy.

Given those who abuse personal information cannot be sent to jail this is yet another instance where Government should be putting proper protections in place before any more data is shared, rather than just hoping nothing goes wrong.

Given the sensitivity of people's financial records that is clearly an inadequate and dangerous approach to take.

David Davis: Data sharing 'borderline insane'

Conservative former minister David Davis has described a Government proposal to share taxpayers' data with private firms as "borderline insane".

Speaking to the Guardian: "The officials who drew this up clearly have no idea of the risks to data in an electronic age."

Former Conservative minister and shadow home secretary Credit: PA

"Our forefathers put these checks and balances in place when the information was kept in cardboard files, and data was therefore difficult to appropriate and misuse", Mr Davis.

"It defies logic that we would remove those restraints at a time when data can be collected by the gigabyte, processed in milliseconds and transported around the world almost instantaneously."

HMRC 'to sell taxpayers' financial data' to third parties

Government plans to share taxpayers' data with private firms were condemned as "borderline insane" by a senior Tory MP.

Under the proposals, HM Revenue and Customs would be allowed to release anonymised information to third parties including companies, researchers and public bodies where there is a public benefit.

The new legislation would allow HMRC to release anonymised tax data to third parties Credit: PA

The Guardian reported that HMRC documents said "charging options" were being examined by officials, indicating that firms could pay to access the data. Treasury minister David Gauke is overseeing the plan, with legislation being drawn up by HMRC, the newspaper reported.

In its response to a consultation on the proposals last year, HMRC insisted the principle of "taxpayer confidentiality" would be protected under the reforms.

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