You can challenge certain tax penalties or decisions from HM Revenue & Customs ( HMRC ). This guide is also available in Welsh (Cymraeg) . You can challenge some decisions about: a penalty (for example if you paid your tax late or filed your tax return late) your tax bill (for example Income Tax, Corporation Tax, VAT) a claim for tax relief a request for information or to check your business records If you want, you can appoint someone else to deal with HMRC on your behalf . You may be able to delay paying the bill or penalty until the matter has been resolved. There’s a different process if HMRC did not act on information .

Disagree with a penalty

HM Revenue and Customs ( HMRC ) may charge you a penalty if you: send a tax return late pay your tax late send an inaccurate return fail to keep adequate records If you disagree with the penalty, you’ll need to explain why to HMRC . For example, if you have a reasonable excuse or you think the penalty is wrong. You usually have 30 days from the date your penalty was issued to contact HMRC or make an appeal. If you miss the deadline, you’ll need to give a reason. There are different ways to challenge the penalty, depending on whether it’s direct or indirect tax. Direct tax penalties (including Self Assessment) Check when and how to appeal a Self Assessment penalty . There are specific forms you must use to: appeal a late penalty for PAYE if you’re an employer tell HMRC your Company Tax Return was late because of a computer problem For any other type of direct tax penalty (for example Income Tax or Capital Gains Tax), follow the instructions on the penalty letter or use the appeal form that came with it. If you do not have an appeal form Send a signed letter to the HMRC office related to your return. Explain why your return or payment was late, including dates. Also include in your letter: your name your reference number - for example your Unique Taxpayer Reference ( UTR ) If you could not file or pay because of computer problems, you should include the following: the date you tried to file or pay online details of any system error message What happens after you challenge a penalty If HMRC does not change their decision or you cannot reach an agreement, you’ll be offered a review . You may also request a review at any time after you make an appeal – you do not need to wait to find out the result of the appeal. To ask for a review, write to the same HMRC office you sent the appeal to. Indirect tax penalties (including VAT) HMRC will offer you a review in your penalty decision letter. You’ll have 30 days to either accept the offer of a review or appeal to the tax tribunal . Reviews are usually quicker than appeals to the tax tribunal. Late VAT penalties for VAT periods starting on or after 1 January 2023 The quickest way to accept the offer of a review is using your VAT online account . Alternatively, you can write to HMRC directly. Tell them which penalty you are challenging and why. HMRC Solicitor’s Office and Legal Services BX9 1ZT Late VAT penalties for VAT periods starting on or before 31 December 2022 You may have been given a type of penalty called a ‘default surcharge’. To challenge a default surcharge, fill in form WT2 .

You can get a tax decision or penalty looked at by someone in a different team who was not involved in the original decision (a ‘review officer’). This is known as a ‘statutory review’. For direct tax decisions and penalties, you must appeal to HM Revenue & Customs ( HMRC ) first before you can get a review. For indirect tax decisions and penalties, HMRC will offer you a review at the time they send you their decision or penalty. How long a review takes Reviews usually take 45 days – the review officer will contact you if it will take longer. What to include When you ask for or accept the offer a review, it helps to tell HMRC : your name your reference number, for example your VAT registration number (VRN) why you disagree After the review is complete When the review officer has completed the review they’ll write to you to either: uphold the decision (the original decision is unchanged) vary the decision (the original decision has changed) cancel the decision If the review officer upholds or varies the decision and you agree with the outcome, you’ll need to pay whatever you owe. If HMRC cancels their decision after the review, you do not need to do anything. If you disagree with the result of the review, you can appeal to the tax tribunal . You must usually do this within 30 days of the date on the review result letter. You can also consider alternative dispute resolution (ADR) , but you need to appeal to the tax tribunal first.

Delay payment during appeals and reviews

You may be able to delay paying a tax bill or penalty if you’re in the process of: making an appeal to the tax tribunal making an appeal to HM Revenue and Customs ( HMRC ) getting a review of a tax decision or penalty Once the appeal or review has been settled, you’ll need to pay whatever you owe unless the decision is cancelled. You can be charged interest on the tax in dispute until it’s paid. You might also be charged a late payment penalty. Direct tax You can ask to delay paying part or all of the tax in dispute when you: appeal to HMRC against a tax decision get either a tax decision or penalty reviewed You’ll have 30 days from starting the process to ask to delay payment. Write to the office that sent you the decision and include: why you disagree what you think the correct amount is when you’ll pay it HMRC will tell you in writing if they agree to you delaying payment. Appealing a penalty If you’ve appealed against a penalty, you will not have to pay until your appeal has been settled. Indirect tax If you’ve asked HMRC to review an indirect tax decision, for example VAT or Insurance Premium Tax, HMRC will not collect any disputed tax until the review has finished. If you appeal to the tax tribunal, you’ll usually have to pay the tax before the tribunal will hear your appeal. If paying the tax would cause you financial difficulty, you can ask HMRC not to collect it until the tax tribunal has made a decision. This is known as a ‘hardship application’. You can make a hardship application by writing to: HMRC Solicitor’s Office and Legal Services Hardship Team Appeals and Reviews S0987 Newcastle NE98 1ZZ You should include: details of the appeal, including the amount you owe the reasons why paying now would cause hardship the amount you’d like to pay later Penalty If you’ve asked for a review, or appealed to the tribunal about a penalty, HMRC will not ask you to pay it until your appeal has been settled.

You’ll usually need to provide a reasonable excuse if you: want to challenge some penalties , for example penalties for a late return or payment miss a deadline, for example being late to accept the offer of a review or to appeal a decision What may count as a reasonable excuse A reasonable excuse is something that stopped you meeting a tax obligation for a valid reason, for example: your partner or another close relative died shortly before the tax return or payment deadline you had an unexpected stay in hospital that prevented you from dealing with your tax affairs you had a serious or life-threatening illness your computer or software failed while you were preparing your online return issues with HM Revenue and Customs ( HMRC ) online services a fire, flood or theft prevented you from completing your tax return postal delays that you could not have predicted delays related to a disability or mental illness you have you were unaware of or misunderstood your legal obligation you relied on someone else to send your return, and they did not You must send your return or payment as soon as you’re able to. What will not count as a reasonable excuse The following will not be accepted as a reasonable excuse: your cheque bounced or payment failed because you did not have enough money you found the HMRC online system too difficult to use you did not get a reminder from HMRC you made a mistake on your tax return

You can contact HM Revenue & Customs (HMRC) if you have a query about a tax decision or penalty. If you do not understand the decision you can also get advice from HMRC or professional help . If you need extra support because of your personal circumstances you can get help from HMRC . If you’re unhappy with the way HMRC has handled your tax affairs you can make a complaint .

Disagree with a tax decision or penalty

Overview

You can challenge certain tax penalties or decisions from HM Revenue & Customs (HMRC).

This guide is also available in Welsh (Cymraeg).

You can challenge some decisions about:

a penalty (for example if you paid your tax late or filed your tax return late)
your tax bill (for example Income Tax, Corporation Tax, VAT)
a claim for tax relief
a request for information or to check your business records

If you want, you can appoint someone else to deal with HMRC on your behalf.

You may be able to delay paying the bill or penalty until the matter has been resolved.

There’s a different process if HMRC did not act on information.

View a printable version of the whole guide

Disagree with a tax decision or penalty

Overview

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Disagree with a tax decision or penalty

Overview

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