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A law firm has claimed that recent new rules suggest that it would be wise for taxpayers to challenge any fines that they receive for late filing of self assessment tax returns or making payments beyond the due date. McGrigors, a national law firm cites six cases which have been lost in court by HM Revenue & Customs, with a number of errors in the fining process being criticised by the courts.

According to the law, if a taxpayer has a ‘reasonable excuse’ for late filing of a tax return or making a payment late, a fine will not be applied. However, the definition of ‘reasonable excuse’ has not been made clear by legislation, which has caused further confusion for taxpayers. The outcome of recent court cases ruling against HMRC makes it clear that the courts are taking a more lenient stance with regards to interpretation of the phrase.

A spokesman for the law firm, Jason Collins said:

“The spate of recent cases suggests that HMRC has been imposing penalties far too harshly on taxpayers who have genuinely tried to comply with the law.”

The law firm are concerned that a large number of taxpayers who receive fines will not challenge them, as the wording on the guidance provided by HMRC makes it seem unlikely that you would be successful in a tribunal. The outcome of the court cases make it clear that the definition of ‘reasonable excuse’ is not clear cut, and should therefore not be accepted at face value.

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