Tax Return Penalties – What’s A Reasonable Excuse?

Date posted: 15th Jun 2020

Under normal circumstances, the Self Assessment Tax Return deadline for the 2018/19 Tax Return was 31 January 2020.

If a Tax Return was submitted after that time, then penalties will likely be imposed by HMRC.

What penalties can HMRC impose?

There is an immediate late filing penalty of £100.

Further, those individuals who have still not completed their 2018/19 Tax Return (as of this month – June 2020), will be faced with daily penalties that will have accrued at a rate of £10 per day since 1 May 2020. This daily penalty charge is imposed for a maximum of 90 days from 1 May 2020. So that could mean additional penalties of £900.

In addition to the immediate penalty and the daily penalty, where the Tax Return is not submitted by 31 July 2020, there is a further penalty of the higher of £300 or 5% of the 2018/19 tax liability.

Further penalties are imposed where the Return still is not submitted by 31 January 2021. Again, this will be the higher of £300 or 5% of the 2018/19 tax liability.

Other penalties and charges

In addition, to the late filing penalties, HMRC are likely to impose late payment penalties and charge interest on any taxes that remain unpaid.

Reasonable excuse

The penalties can be reduced where HMRC believe that the taxpayer has had a reasonable excuse for filing their Tax Return. This could be something like you had serious health conditions for not filing the Return or perhaps all of your tax records had been destroyed in an accident.

Sadly, many individuals do not have a reasonable excuse and HMRC have received some very strange excuses such as:

  • My hamster ate my post.
  • My boiler had broken and my fingers were too cold to type.
  • My mother-in-law is a witch and put a curse on me – this one is our favourite.

If you have a genuine reasonable excuse, then we can help you appeal against any penalties imposed by HMRC. However, either way, we would recommend that you complete any outstanding Tax Returns sooner rather than later, to avoid unnecessary penalties accruing.


You may know that Jack Swigert of Apollo 13 had taken off to the moon and forgotten to do his Tax Return! He was given a reasonable excuse by the US president at that time. That seems very reasonable to us….

If any of the updates in this article raise any issues for you or your business, please contact our Tax team here or call us on 01325 349700.

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