HMRC Penalties | HMRC Tax Dispute resolution | Tax Solicitors & Tax Barristers | London Tax Advice & Tax Services | City Law Firm, LondonHMRC Tax Dispute resolution | Tax Solicitors & Tax Barristers | London Tax Advice & Tax Services | City Law Firm, London

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HMRC Penalties

Each tax or duty has specific rules on penalties for late payment or filing. A penalty may also be due if you do not tell HMRC about a liability to tax at the right time.

Penalties for late filing or late payment

Penalties for late filing of returns and paperwork or late payment can be applied to any of these types of taxes:

Civil Evasion Penalties

These penalties result when HM Revenue & Customs investigate:

The investigation is conducted with a view to the imposition of a civil evasion penalty for dishonest conduct, if HMRC suspicions are confirmed. It is not being conducted with a view to your prosecution for evasion of customs taxes or duties.

These provisions apply to individual travellers, commercial importers and exporters or their agent or representative.

Penalties for errors on returns, payments, paperwork and inaccuracy

These penalties can be charged if there are errors on returns or other documents which:

Penalties may also apply if you do not tell HMRC if an assessment is too low. This type of penalty is known as an ‘inaccuracy penalty’.

From 1 April 2010, this inaccuracy penalty applies to the following taxes and duties:

If documents are sent to HMRC that contain a mistake, HMRC will charge a penalty if the error is:

The level of the penalty is linked to the reason why the error occurred. The more serious the reason, the higher the maximum penalty can be.

How the inaccuracy penalty is calculated

If a penalty arises because of a lack of reasonable care, the level of the penalty will depend on the amount of the extra tax due and the reasons for the error. For example:

The penalty can be reduced if you tell HMRC about the error. HMRC may make further reductions depending on the quality of the disclosure. Penalties can be reduced by:

Failure to notify penalty

If you don’t tell HMRC when changes happen that affect their liability to tax, VAT, or other duties, you may face a penalty. This is known as a ‘failure to notify’ penalty.

A penalty may occur, for example if your client doesn’t tell HMRC, at the right time, that:

This penalty is calculated in a similar way to the inaccuracy penalty- see the section above for more information. HMRC can also reduce it if your client tells them about the failure.

Offshore penalties

From 6 April 2011 HMRC can charge an increased penalty where an inaccuracy penalty, or a failure to notify penalty, arises and the income or asset that gives rise to the penalty is held outside of the UK. The penalty for failing to submit a return for 12 months can also be increased where offshore assets or income are involved. The level of the penalty depends on how readily the foreign jurisdiction shares information with the UK and only applies to Income Tax and Capital Gains Tax.

VAT and Excise wrongdoing penalty

From 1 April 2010 HMRC will charge a penalty known as a wrongdoing penalty if you:

This penalty applies to anyone registered for VAT or Excise, anyone who should be registered to pay VAT or Excise Duty and to other members of the general public.

This penalty is calculated in a similar way to the inaccuracy penalty. HMRC can also reduce it if you tell them about the wrongdoing.

Expert London HMRC Penalty Disputes Lawyers

If you need HMRC Penalty Dispute advice, we are available to aid you at every stage of the HMRC investigate process. Members of our legal team have first-hand experience and knowledge of the internal workings of HMRC. We can provide you with the very best representation in negotiations with HMRC and defending all forms of HMRC fraud, tax inquiry, tax fraud investigation, criminal tax evasion and HMRC enquiries and investigations. Our team specialises in successfully challenging HMRC decisions and will assist you in every aspect of the investigation.

Our specialist Tax Solicitors and Barristers deliver expert technical knowledge, strong negotiation skills and respected advice, which can make a pronounced difference to eventual tax penalties, charges and liability.

Have you been unfairly charged a penalty by HMRC? Our Tax Disputes professionals are here to help and are able to provide clear advice and information to assist you. We regularly negotiate and defend the application of penalties on behalf of our clients. Just call us on 0207 1830 529, or email

Call us on ☎ 02071830529 or email us on for more information about the legal services we provide. Our team of London lawyers are based in Middle Temple adjacent to the Royal Courts of Justice. We are committed to providing professional and specialist legal advice.