How to Appeal a Tax Penalty:

Receiving a tax penalty from HMRC can be a daunting experience. If you find yourself facing one, perhaps due to late filing, inaccurate tax return, delayed payment, or failure to keep accurate records, don’t panic! This comprehensive guide is designed to help you understand your options and guide you through the process of appealing a tax penalty.

Direct Tax Penalties

What Are They? Direct tax penalties pertain to income tax, capital gains tax, or corporation tax. Here’s what you need to know:

  •  Appeal Instructions: If you receive a penalty notice by post, you will find instructions and a form for appealing.
  • Deadline: You must appeal within 30 days of receiving the notice. Missed the deadline? You’ll need to explain why to HMRC, who may still consider your appeal.
Self-Assessment Penalties

Perhaps you’ve incurred a £100 penalty for missing your Self Assessment tax return deadline. Here’s how to handle it:

  • Appeal Online: You can appeal online via your Government Gateway account.
  • Appeal by Post: Alternatively, the postal method is available.


Reasonable Excuse: HMRC will expect a valid reason for your late filing, such as a serious illness, unexpected hospital stay, disability delays, computer failure, or unforeseen circumstances like a fire or theft.

Misunderstanding or Reliance on Others: HMRC might also consider appeals based on misunderstandings of your obligations or if you relied on someone else who failed to file your return.

PAYE Penalties

If you receive a PAYE penalty, here’s your next move:

  •  Online Appeal: Log into your PAYE Online for Employers account and appeal using the ‘Appeal a penalty’ option. You’ll receive immediate acknowledgement.
Indirect Tax Penalties

Indirect tax penalties relate to taxes like VAT. Here’s what you can do:

  • Request a Review: The penalty letter will offer a review, which you may accept or appeal to the tax tribunal.
  • Review by HMRC: Unhappy with the appeal’s outcome? Request HMRC to review the decision. Expect a 45-day process (or longer, with notice).
  • Appeal to the Tax Tribunal: Disagree with the review? Appeal to the tax tribunal within 30 days.


Alternative Dispute Resolution

Considering an alternative to a tribunal hearing? The Alternative Dispute Resolution procedure allows a mediator to work with you and HMRC to find a solution. Appealing a tax penalty doesn’t have to be a stressful ordeal. By understanding your rights and the process, you can take control of the situation.




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