Taxpayers urged to appeal late-payment fines

Taxpayers who received penalties after the 31 January self-assessment tax deadline are being urged to appeal if they believe the fines were wrongly imposed, as HMRC cancelled over 60% of late payment penalties last year, according to new research.

Data provided by HMRC to accountancy firm UHY Hacker Young shows that of the £275m in penalties imposed by HMRC for late payment of self-assessment tax last year, £167m was later cancelled.

HMRC has confirmed that personal or business ‘pandemic-related’ disruption may be a reasonable excuse for late filing of tax returns.

Graham Boar, a tax partner at UHY Hacker Young, said: “HMRC’s more understanding approach towards late filing suggests this may also be the case with the late payment of tax.

“However, taxpayers should not rely solely on HMRC being more cooperative as a result of the pandemic. Where possible, they are encouraged to pay their tax bill if they can afford to, or at least negotiate payments with HMRC.”

He added: “It’s extremely important that taxpayers appeal any penalties they do not agree with. HMRC certainly gets it wrong at times and will correct its mistakes when presented with the evidence.

“Ultimately, taxpayers will be responsible for spotting any mistakes straight away, as once HMRC receives a payment, in their eyes the case is closed and won’t be looked at again.”

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