What happens to penalties when you cancel a tax return?

HMRC issued a tax return for me but my circumstances have changed so I didn’t think it was required. I successfully asked for it to be cancelled, but what happens to the accompanying penalties?

1st February 2014

In the past, HMRC was required to raise a penalty for a late tax return- although the taxpayer was able to appeal if they felt they had grounds. 

However, from April 2012 taxpayers have been able to ask HMRC to cancel a return where they felt it was not required. Where HMRC are agree, any penalties linked to the return, were also cancelled. 

But please note that this change only applies to tax returns for 2012/13 and onwards. However, it can apply to individual, partnership or trust returns.

If you would like any assistance in cancelling a tax return, appealing a penalty or generally managing your tax affairs, please feel free to contact us and we will put you in touch with your local office.

By Jo Nockels

Disclaimer: The information provided is based on current guidance (at date of publication) from HMRC and may be subject to change. Any advice shared here is intended to inform rather than advise. Taxpayer's circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this information, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

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