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Mistaken belief about tax position was a reasonable excuse in appeal against late payment penalties

By Mark McLaughlin, September 2025

The taxpayer’s mistaken belief that she did not need to declare her share of property rental income, combined with an attempt to enquire with HMRC as to the correctness of her assumption, amounted to a reasonable excuse for the purposes of an appeal against late payment penalties. 

Summary 

The taxpayer’s mistaken belief that she did not need to declare her share of property rental income, combined with an attempt to enquire with HM Revenue and Customs (HMRC) as to the correctness of her assumption, amounted to a reasonable excuse for the purposes of an appeal against late payment penalties. 

Background 

The appellant was divorced from her ex-husband, who left the country in 2011. The appellant and her husband were joint owners of property that yielded rental income. The appellant was a 50% owner post-2015 but gave her share of the rental income to her ex-husband.;

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