Missing a tax return, payment or registration deadline can result in an HMRC penalty. However, a taxpayer may have grounds to appeal where circumstances outside the taxpayer’s control prevented compliance.
A reasonable excuse is not determined by a fixed checklist. HMRC considers the particular circumstances, what the taxpayer could reasonably have been expected to do and how quickly the failure was corrected.
What may count as a reasonable excuse?
Depending on the circumstances, examples may include:
- a serious illness that prevented the taxpayer from dealing with their tax affairs;
- a bereavement close to the deadline;
- fire, flood, theft or another unexpected incident affecting essential records;
- an unexpected computer or software failure during preparation or submission; or
- problems with HMRC’s online services that prevented filing or payment.
None of these circumstances guarantees a successful appeal. The taxpayer must normally explain how the event caused the missed deadline and provide relevant evidence.
What will not normally be enough?
HMRC is unlikely to accept an appeal based only on:
- forgetting the deadline;
- not understanding that a return or payment was required;
- relying on another person without taking reasonable steps to check progress; or
- lacking the funds to pay.
A shortage of funds may be considered where it arose because of events outside the taxpayer’s control. Payment should then be made without unreasonable delay once the difficulty has been resolved.
Act without unreasonable delay
A reasonable excuse only covers the period during which the circumstances prevented compliance. Once the excuse ends, the taxpayer should submit the return, make the payment or complete the required notification as soon as reasonably possible.
The taxpayer should also retain a clear timeline and supporting records, including correspondence, call references, screenshots, error messages and evidence of submission attempts.
How to appeal
An appeal should normally reach HMRC within 30 days of the relevant decision or penalty notice. Follow the instructions on the notice and explain:
- what happened and when;
- why the circumstances prevented compliance;
- what steps were taken at the time;
- when the circumstances ended; and
- when the outstanding obligation was completed.
If the appeal is late, HMRC will also need an explanation for that additional delay.
If HMRC accepts the appeal, the relevant penalty may be cancelled. The underlying tax, interest or another penalty may still remain payable.
Bottom line
Do not ignore an HMRC penalty notice. Check the appeal deadline, correct the original failure and prepare a clear, evidence-based explanation. Prompt action can prevent a manageable compliance issue from becoming more difficult to resolve.
This article provides general information. Whether a reasonable excuse applies depends on the particular facts and the type of HMRC obligation involved.
How Naylor Accountancy Services can support you
Naylor Accountancy Services can help review an HMRC penalty notice, establish the relevant timeline, bring outstanding returns or payments up to date and prepare a clear appeal supported by the available evidence. We can also help strengthen your tax calendar, bookkeeping and financial controls to reduce the risk of future deadlines being missed.
Main office: 01892 807 001
Chichester office: 01243 776088
Bourne End office: 01628 530805
Email: [email protected]
F. Verification sources
The final article should be checked against the versions of these sources applying on 27 August 2026:
https://www.gov.uk/tax-appeals/penalty
https://www.gov.uk/tax-appeals
https://www.gov.uk/hmrc-internal-manuals/compliance-handbook/ch160000
https://www.gov.uk/hmrc-internal-manuals/self-assessment-manual/sam10090
https://www.gov.uk/tax-appeals/appeal-to-tax-tribunal
https://www.gov.uk/difficulties-paying-hmrc
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Published by The NAS News Team
