And finally…Taxman now accepting excuses for late returns, says HMRC

DogThe taxman has this year let off people who have filed late tax returns from paying the usual £100 fine, but only if they have a “reasonable excuse”.


HM Revenue and Customs confirmed that decision to be more lenient about the penalty in a leaked memo published by the Daily Telegraph.



A spokesman for HMRC said that the change of tact, which could affect up to 890,000 people, was because it wanted to focus more resources “on investigating major tax avoidance and evasion”.

The newspaper’s report describes how the internal memo asks tax officials to remit fines without further investigation for those people who could show mitigating circumstances, and who appealed against the fine after their tax return was sent in.

HMRC is facing a backlog of almost a million letters and staff have been taken off call centre duties to work through the mail, according to the paper.

The deadline for self-assessment returns was midnight on 31 January.

The Telegraph quotes the memo as saying: “Our penalty regime is intended to influence customer behaviour, but also be clear and cost-effective, fair and proportionate.

“The current way of managing penalties does not meet these objectives, and so we have decided to take a more proportionate approach where a customer has filed their return late, and then appealed against their penalty…

“This means that in the vast majority of cases we will be accepting the customer’s grounds for appeal, and we can cancel the penalty.”

On its website HMRC lists excuses it regards as acceptable for late payment. These include the death of a family member, a stay in hospital, a computer failure, fire, or postal delays.

A HMRC spokesman said it had “always accepted” those with a reasonable excuse should have a penalty waived, and it was now “expediting that process”.

A statement added: “We’ve been clear we want to focus more and more of our resources on investigating major tax avoidance and evasion rather than penalising ordinary people who are trying to do the right thing.

“But no one will be let off the fine unless they’ve now sent in their return and have a good reason for sending it in late.

“This is part of our planned approach to penalty appeals, particularly for small businesses and individuals who have sent their tax return in late.”

However, the former chair of the Public Accounts Committee, Labour MP Margaret Hodge, suggested the rules had been brought into “disrepute”.

She said: “Most people will get tax returns in on time, so if HMRC says it is not going to pursue people who file late, it undermines the system.

“It won’t be seen to be fair. People can now simply look down the list of excuses and pick one.”