Although many small businesses and the self-employed do their best to avoid it, they can sometimes receive a penalty notice from HMRC for non-compliance with tax laws. Appealing HMRC penalties is a process whereby taxpayers can challenge the penalty imposed by HMRC.

Appealing HMRC penalties can be done by providing evidence to support your case, demonstrating that the penalty was unjustified, or arguing that the penalty amount is too high. This process can be complicated and time-consuming, requiring a good understanding of tax liability laws and procedures.

It is important to seek professional advice and guidance when appealing a penalty in order to increase your chances of success. At Annecto Legal, we assist clients by helping them gain access to professional advice on any business-related issue and ensuring they obtain the best funding or insurance for their case.

Which HMRC penalties can be appealed?

Most HMRC penalties can be appealed if you believe that they are unjustified or if there are reasonable grounds for the appeal. Listed below are some examples of the types of HMRC penalties that can be appealed:

• Penalties for late filing: These are penalties if you filed your self-assessment tax return after the deadline. When appealing this penalty, you must provide details of your reasonable excuse for late filing. These penalties can increase from 90 days to 12 months.
• Late payment penalties: You may face a payment penalty for paying your tax bill after the due date.
• Inaccuracies or errors when you submit a tax return: These are penalties for errors when you file your tax return. This can include under-declaring income or over-claiming expenses.
• Failure to notify penalties: These are penalties for failing to notify HMRC of certain changes. Changes to your personal circumstances or to your business may be relevant.
• VAT penalties: These are penalties for errors in your VAT returns. This may include under-declaring VAT owed or over-claiming VAT refunds.

Appealing a HMRC penalty

If you receive a HMRC penalty and believe it to be unjustified, you have the right to appeal the decision. You must typically appeal within 30 days of the date on which you received the penalty. In order to support your case, you must gather evidence that demonstrates why the penalty is unjustified. This may include documents, receipts, correspondence with HMRC, and any other relevant information.

You may wish to contact HMRC to discuss the penalty and find out if they are willing to reconsider. If you are not able to resolve the matter with HMRC, you can then formally lodge an appeal. This can be done online or by post using form SA370. If you are appealing against a £100 late filing penalty from tax year 2015/2016 onwards, you may appeal on HMRC online or by post.

Once your appeal has been received, you will need to prepare your case. This includes setting out your grounds for appeal and providing any supporting evidence. In some cases, an appeal hearing may be necessary. This is an opportunity to present your case to an independent tribunal who will consider the evidence and make a decision,

Following the hearing, you will need to await the outcome. The tribunal will issue a decision in writing, which will either uphold or overturn the penalty. When appealing HMRC penalties, it is essential to have a professional advisor on your side. They can help to strengthen your case and provide guidance when filing appeal forms.

If the tribunal appeal fails, there are specific courts you can turn to or you can apply for a judicial review. At every stage of the appeal process you’ll need expert legal advice.

How can Annecto Legal assist?

Annecto Legal helps clients realise the value of their HMRC penalty appeals. We work closely with litigation funders, insurers and solicitors that seek alternatives to the traditional hourly rate funding model. Many litigants worry about the costs of litigation when appealing an HMRC penalty; however, funding and insurance options, such as third-party funding and ATE insurance may be available.

Unfortunately, because of the high costs of legal actions in the UK, we only assist in disputes which are valued at over £250,000, at the absolute minimum. We would like to be able to help on other claims, but we just don’t have access to any products that can assist on smaller matters.

Get in touch with an expert member of our team for further information and to determine whether you may have the grounds to appeal a penalty.

Contact us today 0800 612 6587.