In a recent case heard by the First Tier Tribunal (FTT), a taxpayer lived overseas, encountered postal delays and had limited internet access, but these did not constitute reasonable excuses for the late submission of a self-assessment tax return.
The case
Initially, while residing in the UK, he had always filed tax returns on time. However, for the 2020/21 tax year, he assumed no return was needed since his UK property income fell within his personal allowance. Unfortunately, HMRC disagreed and issued £1,600 in late filing penalties.
These penalties included:
- A £100 initial penalty.
- £10 daily fines over 90 days.
- Two £300 fines for being six months and twelve months late.
Was there a reasonable excuse?
At the FTT hearing, the taxpayer argued that:
- A lack of internet access prevented him from submitting the return or opening HMRC’s penalty notices.
- Postal delays were beyond his control.
However, the FTT did not accept these reasons. Instead, they emphasised that he should have taken proactive measures, such as arranging mail forwarding. Ignorance of tax obligations is never a valid excuse, and HMRC expects taxpayers to manage their affairs properly.
A warning to others
This case highlights why it’s crucial to stay on top of tax responsibilities, even when no tax is owed.
In this instance, the £1,600 penalty was solely for a late return. If tax had also been unpaid, the situation would have been far worse, with additional penalties and interest. Right now, late payment interest stands at 7.25%, and from April 2025, an extra 1.5% levy will apply.
To avoid costly mistakes, taxpayers should use HMRC’s online calculator to estimate potential penalties and interest for late self-assessment submissions and payments.
In the end, filing on time is always the best course of action.
About the author
