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Reasonable excuse for late tax return appears a difficult issue because each taxpayer that is required to submit a return must do so by 31 January following the end of the previous tax period.

So if you need to file your return for the tax year 6 April 2020 to 5 April 2021, then you have until 31 January 2022.

Fine For Late Tax Return

If you file your tax return late then you will be fined £100. If you file it after 3 months after the filing deadline ie. after 30 April 2022 then you will be fined more.

What Is Not Reasonable Excuse For Not Getting A Late Filing Penalty?

The following are not reasonable excuses for not paying a late filing penalty:

  • Not having the funds, except if this is outside of your control.
  • Reliance on a third party to do or file the return, except if you took reasonable care to avoid the failure.
  • A reasonable excuse no longer exists.

What Is Reasonable Excuse For Late Filing Penalty?

The starting point is that HMRC has to prove that a penalty is due in the first place.

The experience and knowledge of the taxpayer play a part in assessing “reasonable excuse”.

A reasonable excuse is not only one that is genuine but objectively reasonable.

Leading Case At Tribunal

A leading case on this point at the Upper Tax Tribunal on this point is that of Perrin v The Commissioners for HM Revenue and Customs (Tax) [2018] UKUT 156 (TCC). In concluding that case the Tribunal notably highlighted an issue for HMRC to consider:

It is regrettably still the case that HMRC sometimes continue to argue that the law requires any reasonable excuse to be based on some “unforeseeable or inescapable” event, echoing the dissenting remarks of Scott LJ in Commissioners for Customs and Excise v Steptoe [1992] STC 757. It is quite clear that the concept of “reasonable excuse” is far wider than those remarks implied might be the case. In an appropriate case where HMRC base their argument on this unsustainable position, the FTT may well consider it appropriate to exercise their jurisdiction to award costs against HMRC for unreasonable conduct of the appeal. Similar observations apply to the HMRC “mantra” referred to at [109] of the 2014 Decision, to the effect that an “unexpected or unusual event” is required before there can be a reasonable excuse. The statutory phrase is “reasonable excuse”, and those are the words that are to be applied by HMRC and the FTT, interpreted as set out above; the addition or substitution of other words beyond those used in the statute can very easily obscure rather than clarify the value judgment as to whether or not a taxpayer has a reasonable excuse, and should be avoided.

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Disclaimer: What Is Reasonable Excuse For Late Tax Return?

This page: What Is Reasonable Excuse For Late Tax Return?  is not legal advice and should not be relied upon as such. This article What Is Reasonable Excuse For Late Tax Return? is provided for information purposes only. You can contact us on the specific facts of your case to obtain relevant advice via a Free Initial Consultation.