HM Revenue and Customs (HMRC) have traditionally taken a very tough approach regarding time limits, and many cases arising out of HMRC’s failure to accept what the taxpayer claimed was a ‘reasonable excuse’ for failing to lodge a return or tax election or to pay tax on the due date have been decided in HMRC’s favour.

It was all the more surprising, therefore, that HMRC recently announced that they would be adopting a more lenient attitude towards penalties for failure to lodge personal tax returns, which are due at the latest by 31 January following the end of the tax year.

A press release by HMRC revealed that the standard £100 fine for failing to lodge the return on time (a deadline missed by more than 800,000 people this year) was likely to be waived without further enquiry for those offering a reasonable excuse for their tardiness.

HMRC put the change of approach down to the need to make better use of staff time, which is more valuable if spent targeting serious tax irregularities rather than examining the reasons for minor infractions.

It should be noted that the policy does not extend to late payment of tax.


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