In short: To appeal HMRC penalty notices, act within 30 days of the date on the notice and explain your reasonable excuse (for example serious illness, bereavement or a system failure) with dates and evidence. Appeal online, on the right form or by signed letter, then ask for a review if HMRC says no.
Our MTA Accountants team checked this guide. Last reviewed: 7 October 2026.
A penalty notice feels final, but it is not. This guide shows how to appeal HMRC penalty notices step by step, using HMRC’s published rules for the 2026 to 2027 tax year.
Can you appeal an HMRC penalty?
Yes, you can appeal HMRC penalty decisions if you have a reasonable excuse or believe the penalty is wrong. GOV.UK’s guidance on disagreeing with a tax decision or penalty covers late returns, late payments, inaccurate returns and inadequate records. Where you start depends on the tax:
| Penalty | Where you start |
|---|---|
| Self Assessment, late return or payment | HMRC’s online appeal tool, or paper form SA370 (individuals) or SA371 (partnerships) |
| Company Tax Return filed late | An online form, completed in one go, printed and posted |
| Employer PAYE late penalty | A dedicated HMRC form |
| VAT late submission or payment | The review offered in your decision letter |
| Other direct tax, such as Capital Gains Tax | The notice’s instructions, or a signed letter |
Companies House penalties are a separate regime and are not covered here. If your notice relates to a self-employed return, the Self Assessment return checklist helps you avoid a repeat.
What counts as a reasonable excuse for HMRC?
A reasonable excuse is something that genuinely stopped you meeting a tax obligation even though you took reasonable care to meet it. The law gives no fixed definition, so HMRC asks what a reasonable person in your position, wanting to comply, would have done.
HMRC’s published examples include:
- your partner or a close relative died shortly before the deadline
- an unexpected hospital stay, or a serious or life-threatening illness
- computer or software failure while you were preparing an online return
- problems with HMRC’s own online services
- fire, flood or theft that prevented you finishing the return
- postal delays you could not have predicted
- delays linked to a disability or mental illness
Three conditions sit behind every example. The excuse must have existed on or before the due date and throughout the period of default. You must put things right without unreasonable delay once it ends. And the burden of proof rests with you. Several small problems that would fail individually can succeed together.
What will HMRC not accept?
GOV.UK says these will not be accepted: a payment that failed for lack of money, finding HMRC’s online system difficult, not receiving a reminder, and making a mistake on the return. HMRC’s internal manual adds that pressure of work and missing information are not normally enough alone.
Is ignorance of the law a reasonable excuse?
Sometimes. GOV.UK lists being unaware of, or misunderstanding, an obligation, but the test is objective: was it reasonable for someone with your experience not to know, and for how long? HMRC failing to write to you does not help by itself.
Can you blame an agent or accountant?
Only if you took reasonable care. HMRC expects clear instructions, set deadlines and progress checks, and you should be able to describe those steps. Handing over a task and hearing nothing is rarely enough.
How long do you have to appeal, and can you appeal late?
You usually have 30 days from the date the penalty was issued, which is the date printed on the notice rather than the day you opened it. If you miss the window, GOV.UK says you must give a reason.
Late appeals are not hopeless. For direct taxes, HMRC’s manual says a late appeal must be accepted where you had a reasonable excuse for the delay and appealed without unreasonable delay afterwards. If HMRC refuses, you can ask the tax tribunal, where a judge decides whether accepting it serves the interests of justice. Lodge a short appeal first and add evidence later.
How do you appeal an HMRC penalty online or by letter?
Use the route that matches your tax, and keep proof of when you sent it. For Self Assessment, the GOV.UK appeal tool asks for the date the penalty was issued, the dates you filed and paid, and the details of your excuse. You can then appeal online or download the paper form.
For company late-filing penalties, file the Company Tax Return first, then complete the online form in one sitting. For VAT periods starting on or after 1 January 2023, the quickest way to accept the offered review is your VAT online account; otherwise write to Solicitor’s Office and Legal Services, HMRC, BX9 1ZT.
Where no form exists, send a signed letter to the HMRC office handling your return, with your name, your reference such as a UTR, and the dates. If a computer fault was involved, add the date you tried and any error message. HMRC’s reply-time checker shows how long answers currently take.
What evidence should you gather?
Gather proof that the event happened and show how it stopped you acting.
| Excuse | Evidence that helps |
|---|---|
| Bereavement | Date of death, your relationship, a certificate or funeral notice |
| Illness or hospital stay | Admission and discharge dates, plus a GP or hospital letter on the impact |
| Software or computer failure | Error screenshots, supplier emails, repair invoices, dates of each attempt |
| Postal delay | A certificate of posting showing you sent it in good time |
| Someone else failed to file | Your instructions, the deadlines you set, emails showing you chased |
What should your penalty appeal letter say?
Write a timeline a stranger could follow in one reading: your reference and the notice date, the obligation missed, what happened and when, why that stopped you, what you did to cope, the date the problem ended, the date you filed or paid, and the evidence enclosed. Here is an outline to adapt:
[Your name, address, date]
To: the HMRC office named on the notice
Reference: [UTR, VRN or PAYE reference] | Notice dated [date] | Amount [£]I am appealing against the penalty above for [late return / late payment / late VAT return for the period ending (date)]. I had a reasonable excuse.
On [date], [what happened]. Between [date] and [date], I could not [file / pay / sign in] because [reason]. I [what you tried, who you contacted].
The problem ended on [date], and I [filed / paid] on [date], [number] days later, because [reason].
I enclose [list]. Please cancel the penalty. If you decide not to, please tell me in writing how to request a review.
[Signature and name]
Mistakes that sink appeals
- Writing only “I was ill” without explaining how it stopped you acting.
- Leaving unexplained gaps between the excuse ending and the filing date.
- Waiting beyond 30 days without giving a reason, or ignoring the underlying tax meanwhile.
Should you pay the penalty while you appeal?
GOV.UK says you need not pay an appealed penalty until the appeal is settled, but the Self Assessment guidance suggests considering payment anyway: if you lose, interest runs from the original due date, and if you win after paying, HMRC repays it with interest unless you owe other tax.
The tax itself is separate: a good excuse for filing late does not cancel the liability, and interest on unpaid tax keeps building. For disputed direct tax you have 30 days from starting the process to ask HMRC to delay payment.
What happens if HMRC rejects your appeal?
The decision-maker looks again and tries to reach agreement, which GOV.UK says resolves most disagreements. If not, you are offered a statutory review by an officer from a different team, who will uphold, vary or cancel the decision. Reviews usually take 45 days. Counting from the offer, you get 30 days to accept one or appeal to the tribunal, and usually 30 days from the review result to go to the tribunal.
The tax tribunal
The First-tier Tribunal (Tax) is independent of HMRC. You can appeal online with a scan of the notice and your reasons, or by post using form T240. A judge hears both sides and can replace HMRC’s decision. You do not have to pay a penalty upfront.
Special circumstances
Separately from reasonable excuse, HMRC can reduce some penalties where special circumstances make that right. HMRC’s manual says officers should consider this when you appeal an automated penalty, so mention any factors beyond the missed deadline.
How do VAT and MTD penalty points work in 2026?
For VAT periods starting on or after 1 January 2023, every late return earns a point until you reach your threshold, then a £200 penalty follows, and another £200 for each further late return while you remain at it.
| VAT return frequency | Points threshold |
|---|---|
| Annual | 2 |
| Quarterly | 4 |
| Monthly | 5 |
Check points in your VAT online account and request a review there; a reasonable excuse may cancel a point or penalty. Adjustments HMRC makes when you change accounting period cannot be appealed.
For MTD for Income Tax, new points-based rules apply from the tax year you join. HMRC’s penalty guidance confirms there are no penalties for missed quarterly updates in 2026 to 2027, and from later years the threshold is 4 points, then £200. Points below the threshold drop away after 24 months and are separate from VAT points. Your 2025 to 2026 return due on 31 January 2027 stays under the current penalties. Our MTD for Income Tax 2026 preparation guide covers readiness, as do our digital accounting solutions.
When can an accountant help with an HMRC penalty appeal?
An accountant helps most when facts are tangled: several years of returns, overlapping penalties, VAT points building up, or a rejected appeal heading for review.
MTA Accountants works from an office in London SW11 and acts for clients across England, in person or fully online. If your notice involves tax compliance and returns, payroll or CIS filings or company accounts, you can book a first conversation that is both free and non-advisory.
Local help comes through our London accountants and across the areas we serve, such as Croydon, Merton, Westminster and Redhill.
Frequently Asked Questions
How do I appeal an HMRC penalty online?
For Self Assessment, use the GOV.UK appeal tool and enter the penalty issue date, your filing and payment dates, and your reasonable excuse. Company tax return penalties use a separate online form, and VAT penalties go through the review in your decision letter. Keep a copy of everything you submit, and note the date you sent it.
Can I appeal an HMRC penalty after 30 days?
Yes, but you must explain the delay. For direct taxes HMRC has to accept a late appeal where you had a reasonable excuse for the lateness and acted without unreasonable delay afterwards. If HMRC refuses, you can ask the tax tribunal, where a judge decides whether accepting it is in the interests of justice.
Will HMRC cancel a penalty if I simply forgot?
Almost certainly not. Forgetting, not receiving a reminder and making a mistake are listed by GOV.UK as excuses that will not be accepted. Your best prospects rest on an event outside your control, such as illness or bereavement, backed by dates and documents showing how it stopped you acting.
Does appealing stop interest building up?
Not on the tax itself. Interest on unpaid tax continues until it is cleared, whatever happens with the penalty. On the penalty, GOV.UK says that if your appeal fails you will owe interest from the date it was due, which is why it suggests considering payment while you appeal.
Can I appeal a late payment penalty as well as a late filing one?
Yes. HMRC treats them as separate penalties, and each can be appealed on its own facts. The difficulty is that a payment failure caused by lack of money is not accepted as an excuse, unless the shortage itself came from events you could not control.
How long does an HMRC penalty review take?
Reviews usually take 45 days according to GOV.UK, and the review officer will contact you if it will take longer. The appeal pages give no fixed period for the first response, so use HMRC’s reply-time checker, updated weekly, to see current waits for most Self Assessment, VAT and Corporation Tax queries.
Can I appeal a VAT penalty point?
Yes. Your penalty decision letter offers a review, and a reasonable excuse may lead HMRC to cancel the point or the £200 penalty. You can view points and ask for a review through your VAT online account. You cannot, however, appeal the adjustment HMRC makes when you change accounting periods.
What if HMRC rejects my appeal?
You will be offered a statutory review by someone who was not involved in the original decision, and you have 30 days from that offer to accept it or go to the tax tribunal. You can also request a review at any time after appealing.
Is a bank overdraft or cash flow problem a reasonable excuse?
Generally not. HMRC expects ordinary cash flow pressure to be managed, perhaps through short-term borrowing or an agreed payment plan. It may be accepted if the shortage arose from something outside your control and you showed proper foresight. Tell HMRC early if you cannot pay.
Do I need an accountant to appeal an HMRC penalty?
No, individuals and companies can appeal directly using the routes above. An accountant becomes useful when there are several penalties, VAT points or MTD rules involved, or when you need help organising evidence and wording the letter. An adviser can also tell you honestly whether a case is worth contesting.
If a penalty notice is sitting on your desk, check its date today and start gathering evidence. When you want a second opinion before you appeal HMRC penalty notices, Book a Consultation with MTA Accountants, International House, 66 Lavender Hill, London, SW11 5RQ. Call 020 3488 8635 or email office@mtaaccountants.co.uk. More guides are in MTA Insights.
This article offers general information about HMRC processes as at 7 October 2026 and is no substitute for advice on your own case. Rules, thresholds and forms change, so check the linked GOV.UK pages before you act.