How to Appeal an HMRC Penalty

The deadline is short

You usually have 30 days from the date the penalty was issued. If you miss that, you can still appeal, but you will need to give a reason for the delay, so do not sit on it.

How you appeal depends on the tax

For direct taxes such as Self Assessment, use the appeal form that came with your penalty letter. Where there is no form, you send a signed letter to the HMRC office that deals with your return.

VAT works differently. The penalty decision letter itself offers you a review, and you have 30 days to accept it or appeal to the tax tribunal. You can accept online through your VAT online account.

What to include

Say why your return or payment was late, and give dates. Include your name and your reference number, such as your Unique Taxpayer Reference. If computer problems stopped you filing online, give the date you tried and the details of any error message.

Keep it factual. A short account that matches your records is more persuasive than a long one that does not.

What counts as a reasonable excuse

A reasonable excuse is a valid reason that stopped you meeting the obligation, and you still have to file or pay as soon as you are able. GOV.UK's examples include a serious illness or unexpected hospital stay, the death of a partner or close relative shortly before the deadline, your software or HMRC's online services failing, a fire, flood or theft, and postal delays you could not have foreseen.

Some things do not count: not having enough money to pay, finding HMRC's online system too difficult, not getting a reminder, or making an error on the return.

GOV.UK also lists misunderstanding your legal duty, and relying on someone else to file for you when they fail to, as things that may count. Be realistic about which of these describes your situation.

If HMRC does not change its mind

You will be offered a review. You can also ask for one at any time after you appeal, without waiting for the appeal result, by writing to the same HMRC office. Reviews are usually quicker than the tax tribunal.

The tax tribunal is the next step. If you have asked for a review, you wait for its outcome before going there.

You can also appoint an agent to deal with HMRC for you if you would rather not handle it yourself.