HM Revenue & Customs (HMRC) has announced that 850,000 people are late with their tax returns and will receive automatic fines of £100 for sending returns in after this year’s deadline, 2 February 2012. More fees and fines follow later, plus interest, until you get the form in and acknowledged. Unless… you can produce a ‘reasonable excuse’.
So what works? ‘Reasonable excuse’ in HMRC’s terminology equals ‘serious trouble at home or at work’ in English. Hospital-worthy illness and family bereavement are examples of domestic trouble a tax office might accept. At work, HMRC also accepts some IT issues as ‘reasonable’ – such as a failure in their own computer system (cackle) or your computer breakdown just before or during the preparation of an online return. Effectively, the trouble should be so serious that the last thing you're worried about is a late tax return.
However, HMRC points out that some excuses, such as finding “the online system too complicated” or a business that “left everything to [your] accountant to do and they let you down” is not acceptable.
Finally, HMRC confirms that claiming you “forgot about the deadline” will not avoid penalties.
"We want the returns, not the penalties. So anyone who still has not sent theirs should do so as soon as possible," said Stephen Banyard of HMRC. If you have had a penalty notice and think it’s unfair, you should appeal in writing by 31 March.
A business must explain why it is appealing – for instance, it has a reasonable excuse for being late or that the return was sent on time – and the appeal must come from you at the business, your usual tax adviser, or the nominated partner of your partnership. Good luck.