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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.

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