Following on from my previous blog post about HMRC penalties Howzat – Appealing against a HMRC penalty | SmallBiz Accounts
I received a letter last week successfully cancelling the penalties HMRC charged to a customer of mine. I thought our excuse was reasonable, and so did HMRC.
I encourage anyone with a reasonable excuse for paying tax or filing a return late and receiving a penalty to challenge HMRC and ask for it to be cancelled.
In my experience, HMRC will cancel the penalties for genuine reasons.
I have just sent another appeal letter for a dentist customer who, despite having a time-to-pay arrangement that allows him to pay his tax arrears to HMRC in instalments, received £2k of penalties last month for a late payment.
If you agree to a time-to-pay arrangement you honour, HMRC should not issue late penalties to you.
HMRC will have sent these penalties in error, but they must still be appealed in writing within 30 days.
I’m hoping that HMRC will cancel these penalties, too. Once they realise they made an error, they will reimburse the costs my customer has paid to make the appeal for him, which will be a win-win.
I wonder how many taxpayers pay their penalties without challenging them first and end up with a lose-lose.