Thousands are being urged to problem automated fines from HMRC after new figures revealed the taxman loses the majority of instances when penalties are appealed.
Latest official information exhibits taxpayers won more than 62% of appeals against automated HMRC penalties, that means tens of hundreds of people have efficiently overturned fines for late submitting or late cost.
In the six months between March 31 and September 30 2025, a complete of 32,258 appeals were lodged against automated penalties issued by HMRC. Of those, 20,076 were won by taxpayers, leaving HMRC victorious in just 37.8% of instances.
Experts warn that the figures counsel many people who fail to appeal could be handing over tons of of kilos unnecessarily.
With the self-assessment deadline of January 31, 2026, now less than ten days away, HMRC has stepped up warnings to tens of millions of taxpayers to pay up on time.
In a current message despatched to those signed up for self-assessment, HMRC said: “Do you still need to pay your self-assessment tax bill? If so, you must make a payment by January 31, 2026 – or you may risk having to pay a penalty.”
But accountants say the automated nature of HMRC’s systems means penalties can be triggered even when taxpayers have a legitimate excuse.
Accountancy firm UHY Hacker Young said the scale of profitable appeals exhibits it is value difficult fines in most instances.
The firm said: “The fact taxpayers win so many cases means that it’s worth people appealing any automated fines they receive unless they feel they are in the wrong. If they do not, they are unnecessarily giving extra money to the taxman.”
Why HMRC points automated fines
HMRC robotically points a £100 penalty if a self-assessment tax return is filed late, even if there is no tax to pay. Additional penalties apply the longer the delay continues.
Late cost penalties begin at 5% of the unpaid tax, charged after 30 days, and are repeated at six and 12 months. Interest is also added.
Automatic penalties are also issued for late VAT and company tax returns, late funds, inaccurate returns, or failures to keep ample data.
Neela Chuahan, accomplice at UHY Hacker Young, said taxpayers should not assume HMRC’s penalties are always appropriate.
She said: “When you appeal you have the opportunity to provide evidence and argue your case. Given HMRC’s success rate, you are more likely than not to win an appeal against the taxman and overturn an automatic penalty.”
HMRC will cancel a penalty where it accepts the taxpayer has a “reasonable excuse”. This can embrace pc failures, issues with the HMRC web site, postal delays, critical sickness, bereavement, or an adviser failing to submit a return on time.
Concerns about the system are not new. Last summer time, the Tax Policy Associates think tank revealed, through a Freedom of Information request, that 600,000 people over the previous 5 years had been hit with late submitting penalties despite owing no tax at all.
How to appeal an HMRC penalty
Taxpayers often have 30 days from the date of a penalty discover to appeal. Those who miss the deadline must clarify why.
Appeals can be made online, utilizing the kind included with the penalty letter, or by writing to HMRC. Taxpayers must clarify why they believe the penalty is mistaken or why they had a cheap excuse.
HMRC’s steering advises people to pay the penalty even if they appeal, as curiosity will be charged if the appeal fails and the effective stays unpaid.
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