Mental health episode is a “reasonable excuse” for late tax return, says HMRC

Taxpayers suffering from mental health conditions are likely to be given greater consideration should they file a late tax return, according to a leading tax authority.

The Association of Tax Technicians (ATT) said HM Revenue & Customs (HMRC) has a growing awareness of mental health and “appear to be taking this into account regarding fines”.

Filing a tax return just one minute late will incur an automatic penalty of £100. A recent Tax Tribunal ruling indicated that these fines may be illegal, but for now, the penalties will stick.

The latest figures suggest that around 800,000 people are automatically fined every year – but only those with a “reasonable” excuse will have theirs waived.

What is a ‘reasonable’ excuse and what is not is at HMRC’s discretion, but it said if someone had a mental health condition, such as an episode of depression, they would not ask them to pay a fine.

Michael Steed, president at the Association of Taxation Technicians, said: “This is not something that has happened overnight but HMRC definitely has a growing awareness of mental health and appear to be taking this into account regarding fines. Tax officers can use their discretion to waive fines where they feel there are special circumstances.

“The topic has become a lot more high profile especially after the Daily Telegraph’s interview with Prince Harry. HMRC also don’t want the bad publicity of fining depressed people.

“However if taxpayers become repeat offenders then their patience may start to wear more thin.”

An HMRC spokesman said: “Anyone with a reasonable excuse for filing late won’t have to pay penalty.”

The deadline for filing the Self Assessment tax return is Wednesday 31 January 2018.