Automatic fine you should always challenge as 73% fight back and WIN
A WHOPPING 73% of taxpayers have had their fines overturned after they challenged a common fine handed out by HMRC.
The tax office issues automatic payments if you miss a filing and payment dates even if you do not owe any tax.
Official figures show that some 3,807 automatic fines were looked at by the taxman after payers challenged them in the second quarter of the year, and 2,755 of them were cancelled.
A further 24 were reduced, giving taxpayers a 73% success rate in challenging fines, according to a report in The Times.
Myron Jobson, senior personal finance analyst, interactive investor, told The Sun: “Challenging an automatic late filing or payment penalty from HMRC is not just about questioning the fine itself – it’s about ensuring that any penalty issued is fair and accurate.
“HMRC systems can sometimes trigger penalties automatically, even when there are valid reasons for missing deadlines, such as unforeseen circumstances or administrative oversights.
He added: “By appealing, you have the opportunity to provide evidence and argue your case, potentially overturning the penalty.”
HMRC will send you a penalty notice if you miss the deadline for either sending in your tax return or paying your self assessment tax on time.
You have to pay a tax return if any of the following appiled to you:
- You were self-employed as a ‘sole trader’ and earned more than £1,000 (before taking off anything you can claim tax relief on)
- You were a partner in a business partnershipy
- You had a total taxable income of more than £150,000
- You had to pay Capital Gains Tax when you sold or ‘disposed of’ something that increased in value
- You had to pay the High Income Child Benefit Charge
You have until October 31 2024 to submit your tax returns for the year.
If you do not agree that a penalty is due, you can appeal against it to HMRC.
To challenge a fine by the HMRC you must first write to them, and then if no agreement can be made then you have to request an internal review.
The taxman said you should consider paying the penalty even if you appeal.
If you do not, and your appeal is rejected, you’ll have to pay interest on the penalty from the date it was due to the date you paid it.
If HMRC approves your appeal, it will repay what you’ve paid back to you with interest from the date you paid it.
You have 30 days from the date of the notice to appeal against it in writing.
The findings come as the HMRC has been facing a mountain of unanswered calls and a backlog of letters since the pandemic.
How to fight back against an incorrect tax bill
HMRC can accept excuses for self-assessment delay including the recent death of a partner, unexpected hospital stays, computer failures, HMRC online crashes, and fires.
But if you’re still being fined or sent a bill when you think you shouldn’t be, you can fight back by asking HMRC to review its decision.
You can appeal online via your Government Gateway account or by filling out and returning a postal form.
If you still disagree, you can take your case to the tax tribunal – again, just make sure you do this within 30 days of the review decision.
You can also consider applying for Alternative Dispute Resolution using the Government’s online form.
The National Audit Office said HMRC did not answer up to 45 per cent of calls to its helpline last year and callers who did manage to speak to an adviser waited an average of 23 minutes.
This was up from five minutes in 2019.
How do I appeal?
Before you make an appeal it is important you have the following documents to make sure you can fight your case to the best of your ability:
- The date the penalty was issued
- The date you filed your Self Assessment tax return (if you have submitted it)
- The date you paid your tax (if you have paid it)
- Details of your reasonable excuse for filing your return late, or not making your payment on time
If you are sent a letter by the taxman you will be given an option to appeal
You can either accept the offer of a review or appeal to the tax tribunal.
If you accept a review by HMRC
If you have your review looked at by the HMRC the tax decision will be reviewed by someone who was not involved in the original decision.
HMRC will tell you when you can have a review and they can take up to 45 days to process.
They usually get back to you in writing.
If you appeal to the tax tribunal
You can appeal to the tax tribunal if you if you disagree with HMRC’s review decision – you must usually do this within 30 days of the review decision.
Reviews by HMRC are usually quicker than appeals to the tax tribunal – but it is entirely up to you what route you would prefer to go down.
How much can you be fined?
You’ll get a penalty if you need to send a tax return and you miss the deadline for submitting it or paying your bill.
You’ll pay a late filing penalty of £100 if your tax return is up to 3 months late. You’ll have to pay more if it’s later, or if you pay your tax bill late.
You’ll be charged interest on late payments.