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The number of taxpayers who have successfully disputed the penalties given to them for paying their tax late has increased by four times in the last six months compared to this time last year.

HMRC states that fines will be waived if the taxpayer can provide a “reasonable excuse”. However, recently it appears that tribunal judges are favouring the taxpayers under the notion that HMRC are having too narrow a view in terms of the law resulting in fines being wavered in 14 cases this year.

Tax payers are now being urged to challenge HMRC if they are being unfairly penalised. You or your accountant has a right to dispute their fines and if your challenge is dismissed by HMRC, you can take it to a tax tribunal. Examples of circumstances where fines have been overturned include a tribunal whereby HMRC imposed a fine as the individual’s return arrived after the deadline. However, the court ruled in favour of the taxpayer as the postage showed he had posted in four days before the deadline. Another taxpayer was penalised after filing his return late as a result of HMRC sending the relevant forms out late. HMRC believed that this did not constitute a “reasonable excuse” as he could have submitted his return online. However, the judge disagreed and the taxpayer won the case.

Although, the number of taxpayers successfully challenging HMRC has risen, there is still only a very small proportion of the number of people fined by the Revenue disputing them. Jason Collins, a partner at McGrigors the law firm has said “The way in which HMRC’s guidance is worded makes taxpayers think they would stand little chance in a tribunal. Taxpayers who feel they have been unfairly fined really should challenge HMRC.”

About The Author

Lee Murphy

MAAT and ICPA accountant, with a passion for making accountancy and bookkeeping accessible. Other interests include cloud-based software development for web and mobile access, keeping fit, reading, and entrepreneurship.

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