Disagree with a tax decision or penalty

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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:

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.

View a printable version of the whole guide

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