What it looks like
A Self Assessment penalty dispute usually starts with a brown HMRC letter that feels out of the blue: a £100 late filing penalty, then extra daily penalties, then six- and twelve-month charges. In many UK households the pattern is the same: the return was filed, but HMRC says it wasn’t; the return wasn’t needed, but the record still shows a notice to file; or the online account shows “received” yet the penalty still lands. Sometimes the first sign is a tax code change or a demand for payment that includes penalties and interest.
Common real-world situations include: someone stopped self-employment but never told HMRC to stop Self Assessment; a person moved house and missed the notice to file; an agent filed but the submission didn’t attach to the right UTR; or a return was started online and assumed “done” when it was only saved. Another frequent UK scenario is a bereavement or serious illness around the deadline, where paperwork and access to accounts fell apart for a period.
Why penalties happen
Miss the filing deadline
The most common cause is simply filing after the deadline (31 January online for most people). HMRC issues the initial £100 penalty even if no tax is due. After three months, daily penalties can be added, and later penalties can follow at six and twelve months.
Stay registered by mistake
Many disputes come from people who no longer need Self Assessment but are still on HMRC’s system as needing to file. If a notice to file was issued for that tax year, HMRC can charge penalties until the return is filed or the notice is withdrawn. This is typical after stopping self-employment, ending rental income, or moving to PAYE-only work.
Use the wrong reference
Returns and payments can go astray when the wrong UTR is used, a spouse’s details are mixed up, or an agent submits under an old authorisation. HMRC systems can show a return “received” but not “captured” against the right year, which still triggers penalties.
Hit access and identity issues
Lost Government Gateway access, changed phone numbers for two-factor authentication, or identity checks that stall can prevent filing on time. HMRC may still expect the return unless the notice to file is withdrawn.
Face exceptional disruption
Hospital stays, bereavement, fire/flood, domestic abuse, or serious mental health crises can amount to a “reasonable excuse” if there is evidence and the return was filed as soon as it was practical afterwards. HMRC tends to look for a clear timeline and prompt action once the disruption ended.
Checks before disputing
Confirm the tax year
Match the penalty letter to the exact tax year (for example, 2022–23) and the deadline it refers to. Disputes often fail because the appeal talks about the wrong year or mixes multiple years together.
Verify notice to file
Check whether HMRC actually issued a notice to file for that year. If there was no valid notice, penalties may not be due. If there was a notice, the route is usually: file the return (or ask for withdrawal if genuinely not required) and appeal the penalties with reasons.
Check submission status
If the return was filed online, look for the submission receipt and confirmation screen in the account, and save a copy. If filed via software or an accountant, ask for the IRmark/receipt and the submission date/time. If posted, find proof of posting and a copy of what was sent.
Reconcile payments
Penalties can be mixed up with late payment interest. Check what is penalty, what is interest, and what is tax. If a payment was made, confirm it was allocated to the right year and reference.
Step-by-step fixes
File first where possible
If the return is outstanding, filing it is usually the fastest way to stop penalties increasing. Even if the penalty is being appealed, HMRC commonly expects the return to be filed unless the notice to file is withdrawn. If access issues are blocking filing, record the dates of failed login attempts and any HMRC contact.
Ask to withdraw the notice
If there was no need to be in Self Assessment for that year (for example, income was fully taxed under PAYE and there was no rental/self-employed income), contact HMRC to request withdrawal of the notice to file for the year in question. If HMRC agrees, penalties linked to that notice are typically removed. Be ready to explain why Self Assessment was not required and provide figures if asked.
Appeal within the time limit
Appeals normally need to be made within 30 days of the penalty notice date. If it is late, include why it is late and what prevented an earlier appeal. HMRC does accept late appeals in some situations, but it helps to show prompt action once the barrier cleared.
Use a clear timeline
Successful disputes usually read like a timeline: when the notice was received (or not), what happened, what steps were taken, and when the return was filed. Keep it factual. HMRC tends to respond better to specific dates and evidence than to general statements.
Attach practical evidence
Evidence that often helps includes: hospital letters showing admission/discharge dates; death certificate and probate/administration paperwork; insurer letters for fire/flood; screenshots of Government Gateway lockouts; proof of address change and mail redirection; accountant emails showing submission attempts; and proof of posting for paper returns. If the issue was that the return was filed, include the submission receipt and the exact time/date.
Challenge daily penalties carefully
Daily penalties (after three months) are a common sticking point. If the return was filed before the daily penalty period, point that out clearly. If HMRC did not issue the daily penalty notice correctly, raise that. If the return was late due to a reasonable excuse, explain why the excuse covered the whole period and why filing sooner was not practical.
Request a review if refused
If HMRC rejects the appeal, ask for an internal review. This is a normal next step and can resolve disputes where the first decision was based on missing context. If the review still refuses, the next stage can be an independent tribunal appeal, but it is usually worth tightening the evidence first.
Keep contact records
Write down call dates, times, and the name or ID of the adviser if given. Save webchat transcripts and copies of letters. If HMRC gave incorrect advice (for example, saying no return was needed), note exactly what was said and when, and keep any supporting messages.
If it’s ignored
Watch penalties stack up
Ignoring the first £100 penalty often leads to larger amounts: daily penalties, then six- and twelve-month penalties, plus interest on unpaid amounts. Even where no tax is due, the penalty can still grow if the return remains outstanding.
Expect debt collection steps
Unpaid penalties can move into HMRC’s debt collection process. That can mean repeated letters, phone contact, and in some cases formal enforcement action. Disputes are harder when there is no paper trail and the return is still missing.
Risk knock-on admin problems
Ongoing Self Assessment issues can cause complications with future tax years, payments on account, and tax code changes. It can also make it harder to close Self Assessment cleanly when self-employment has ended.
When to escalate
Escalate after refusal
If an appeal is refused and the reasons do not match the facts (wrong dates, ignoring evidence, misunderstanding the situation), escalation is usually justified. Ask for a review and provide a short, structured response that points to the evidence.
Escalate for system errors
Where HMRC systems show conflicting information (submitted vs not received, payment allocated to the wrong year, duplicate UTRs), escalation works best with screenshots, receipts, and a request for a technical correction rather than a general complaint.
Prepare a tidy evidence pack
A useful pack is typically: the penalty notice, the submission receipt (or proof of posting), a one-page timeline, and supporting documents. Label files by date. If there are multiple years, separate them to avoid confusion.
Use related dispute habits
Many people find it easier to handle HMRC disputes using the same approach used in other UK disputes: keep everything in writing, stick to dates, and ask for the decision basis. The same discipline used for a Default notice dispute often prevents a tax penalty appeal turning into a long back-and-forth.
FAQ
Can a £100 penalty apply with…
Yes. The late filing penalty is about the return being late, not the amount of tax owed.
What counts as a reasonable excuse?
It depends on the facts, but HMRC commonly looks for something outside control (serious illness, bereavement, major disruption) plus evidence and prompt action once it was possible to file.
If the accountant caused the delay,…
Sometimes, but it is not automatic. HMRC often expects the taxpayer to ensure filing happens. Evidence of what the agent did and when can still help, especially if there was a genuine system or authorisation issue.
What if the notice to file…
Non-receipt alone is not always enough, especially if HMRC sent it to the address on record. Evidence of address changes, mail redirection, and when HMRC was informed can strengthen the argument.
Should the return be filed before…
Usually yes, because it stops further penalties and shows cooperation. If the return genuinely was not required, request withdrawal of the notice to file instead.
How long do HMRC appeals take?
Times vary. Straightforward cases with clear evidence can be resolved faster; cases involving system corrections or multiple years often take longer and may need follow-up.
Before you move on
Pull together three things: the penalty notice date, proof of filing (or why no return was needed), and a simple timeline with supporting documents. Then choose one next step today: file the outstanding return, request withdrawal of the notice to file, or submit the appeal within the deadline. If you felt pushed to act quickly or told there was no time, that’s often a sign the process wasn’t handled properly.
Get help with the next step
If the penalty letters are piling up or the online record doesn’t match what was filed, get the facts in order and ask for targeted help. Use the contact form at https://ukfixguide.com/contact/ to outline the tax year, penalty amounts, and what evidence is available.
