HMRC late fines may not be legal

Have you ever received a £100 fine for a late tax return? Well if you have, then stand by your beds. A judge recently ruled that HMRC’s automatic fines for people who file their self-assessment tax returns late may not be legal.

The judgement hinges on the fact that late penalty fines are issued by a computer rather than a human. The case was triggered by Khan Properties – a small property business that had filed its return two weeks late. The Judge, Richard Thomas, let the firm off the fine as it was automatically generated by a computer. He ruled that the firm also had a reasonable excuse for filing late.

The judge commented on the penalty saying: “In my view the requirement… is for a flesh and blood human being who is an officer of HMRC to make the assessment, that is to decide to impose the penalty and give instructions which may be executed by a computer.”

Each year around 800,000 people miss the 31 January self-assessment deadline – generating £80million in fines. If the ruling proves the computer-generated fines to be unlawful, it could pave the way for a PPI-style influx of appeals.

Liz Fisher, Tax and Employer Solutions Manager at Mitchells Chartered Accountants and Business Advisers: “HMRC has been gradually digitising the tax system in an effort to not only make it more straightforward for people to file returns but also to bring money into the Treasury more quickly. This could now backfire on HMRC. However, it’s important to not miss deadlines as there will be penalties.

“Anybody who believes they have a valid reason for filing their tax return after the deadline should get in touch with us and discuss their options.”

We are here to help. For guidance and advice on tax returns talk to our expert team on 01246 274 121 or send an email to with your query.

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