HMRC Penalty Appeal Guide

How to Appeal an HMRC Penalty

Over 1.1 million HMRC penalties are issued every year for late filing and late payment of Self Assessment tax returns. Many of these can be successfully appealed if you have a reasonable excuse.

What penalties can be appealed?

  • Late filing (Self Assessment) — £100 automatic penalty, rising to £10/day after 3 months, plus further penalties at 6 and 12 months
  • Late payment (Self Assessment) — 5% of unpaid tax at 30 days, 6 months, and 12 months
  • VAT default surcharge — 2% to 15% of outstanding VAT
  • Corporation Tax late filing — £100 to £1,500+
  • Companies House late filing — £150 to £1,500 (private companies)
  • PAYE late filing — £100 to £400+ per month

How to appeal

You have 30 days from the date on your penalty notice to appeal. There are four ways to submit your appeal:

  1. Online — Log in to your HMRC Self Assessment account via Government Gateway and select "Appeal a penalty"
  2. By post — Complete form SA370 and send it to the address on your penalty notice
  3. By letter — Write a formal appeal letter to HMRC citing your reasonable excuse
  4. By phone — Call HMRC Self Assessment helpline on 0300 200 3310

What happens next?

HMRC aims to respond within 45 days. If they accept your appeal, the penalty is cancelled. If they reject it, you can request a statutory review by a different HMRC officer, or appeal directly to the First-tier Tribunal (Tax Chamber) — which is free and independent of HMRC.

Key legislation

  • Taxes Management Act 1970 — s.93 (late filing), s.86 (late payment interest)
  • Finance Act 2009 — Schedule 55 (late filing penalties), Schedule 56 (late payment penalties)
  • Perrin v HMRC [2018] UKUT 156 — the structured legal test for reasonable excuse

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