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Illness, Mental Health And HMRC Penalties: When Your Health Is A Reasonable Excuse

Illness, a mental health condition, a bereavement or caring for someone seriously ill can be a reasonable excuse for an HMRC penalty, if it stopped you meeting the deadline and you acted once you could. What HMRC accept, the evidence that works and how to appeal.

Liam Williams

Liam Williams

— 12 min read
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Illness, a mental health condition or disability, a bereavement, or caring for someone seriously ill can be a reasonable excuse that cancels an HMRC penalty.

What decides it is not the diagnosis. Your health must have stopped you meeting the deadline, you need dated evidence of that, and you must have put things right without unreasonable delay once you could.

Your deadline: appeal within 30 days of the date on the penalty notice. Too unwell to appeal in time? Ask for a late appeal now: the same evidence can explain both delays.

Still unwell? Ask HMRC for extra support or authorise someone to act for you. Our reasonable excuse guide covers the general rules.

On this page:

Your Situation: Short Answers

Your situation Can it be an excuse? What decides it
Seriously ill or in hospital around the deadline It can be Whether it stopped you, and how soon you acted
A mental health condition It can be Evidence of how it affected you at the time
Illness that began after the deadline Not for missing it It can still support a special reduction
A partner or close relative died It can be Whether it affected you at the deadline
Caring for someone seriously ill It can be Whether it took up your time and stopped you arranging cover
A long-term, fluctuating or recurring condition, or a disability It can be Whether you could reasonably have planned for it
Someone you relied on let you down, or your accountant fell ill It can be Whether you took reasonable care

What HMRC Accept For Illness And Mental Health

GOV.UK's list of reasonable excuses includes:

  • "your partner or another close relative died shortly before the tax return or payment deadline"
  • "you had an unexpected stay in hospital that prevented you from dealing with your tax affairs"
  • "you had a serious or life-threatening illness"
  • "delays related to a disability or mental illness you have"

The defence covers late returns and payments, failure to notify that is "not deliberate" (Sch 41 para 20 FA 2008) and, under the new penalty regime, penalty points (Sch 24 para 19(1) FA 2021). Inaccuracy penalties turn instead on reasonable care, judged by "the particular person’s abilities and circumstances" (CH81120; reducing HMRC penalties).

What Decides It: Did Your Health Stop You?

Numbers in square brackets, like [37], are paragraph numbers in the decision cited, so you can find the passage and refer to it in your own appeal.

In [2022] UKUT 216 (TCC), the Upper Tribunal said: "There is no reason in principle why mental health problems might not amount to a reasonable excuse. HMRC accept that. But whether that is so in a given case will depend on the evidence before the tribunal" ([36]).

How severe? In [2022] UKFTT 155 (TC), the tribunal said there would in most cases need to be evidence that the taxpayer "cannot deal with his or her affairs to such an extent that the taxpayer cannot submit a return or perform the necessary preparation to submit a return" ([77]).

HMRC's guidance says people should explain not just their condition "but also how that detrimentally affected their ability to comply with their tax obligation" (CH160400). A tribunal then applies the four steps in Perrin v HMRC [2018] UKUT 156 (TCC).

If You Managed Other Things

In [2023] UKFTT 1007 (TC), a mental health condition that hadn't stopped the appellant selling a property and dealing with solicitors and lodgers wouldn't, the tribunal found, have stopped a reasonable person in that position telling HMRC about the sale (our analysis of the fabricated case law decision).

But the 2022 Upper Tribunal decision said that whether doing other things, such as working, undermines an excuse "plainly depends on evaluating the particular factual circumstances" ([39]). If you kept working, it helps to explain what made the tax task different.

Timing: At The Deadline, And Until You Put It Right

Your excuse is tested at two points. [2022] UKUT 216 (TCC) held that it must rest on "circumstances which existed as at the relevant filing date", while later circumstances "could of course be relevant" to whether the failure "had been remedied without unreasonable delay" ([31]).

So an illness that starts after the deadline can't excuse missing it: in [2022] UKFTT 401 (TC), nothing showed the appellant's condition in the run-up to the filing date. But if you had an excuse at the deadline, later illness counts when judging how quickly you then acted.

That Upper Tribunal case turned on that second point: the appellant was taken to have had an excuse at the deadline, but lost because the return came more than two and a half years late while the appellant kept doing demanding, complex work ([32], [41]).

In HMRC's own example of success (CH160400), a self-employed builder with no support, unable during treatment for a mental health condition to file or appoint an agent, appointed one once well enough to make decisions, and filed and paid soon after. With medical evidence, HMRC accept the excuse: no penalties are due.

If you knew in advance you'd be in hospital or convalescing for a long time, HMRC normally expect you to have made arrangements; an emergency admission may be different. With a fluctuating or recurring condition, they ask whether you could reasonably have planned, or whether the condition prevented it (CH160400). They don't usually accept the same excuse twice, expecting someone with a disability to plan ahead, though they can on the facts (CH160500). Our general guide covers how long is too long.

Bereavement And Caring For Someone

HMRC's manual says a partner's or close relative's death that affected your ability to comply at the time "will normally be treated as a reasonable excuse" (CH160300).

HMRC accept a partner's or close relative's serious illness only if it "took up a great deal of the person’s time and resources and prevented them from being able to meet the relevant obligation or put in place other arrangements" (CH160500).

In [2025] UKFTT 1251 (TC), a company's director, the only person who could authorise its payments, cared full time for family members for almost four weeks after a medical emergency, so a VAT payment was missed while the bookkeeper was unexpectedly away. HMRC said the director should have planned for it. The tribunal held that these factors and HMRC's late reminder, unlikely to be enough one by one, together amounted to a reasonable excuse, and the company paid the day the excuse ended ([51]-[53]).

The Evidence That Works

No law requires medical evidence, and HMRC's guidance asks at minimum for evidence confirming "the nature of the illness" (CH160400). But it is the strongest kind, and claims without it have failed. What helps:

  • A letter covering the right dates, from a doctor, mental health professional or social care professional, saying how your condition affected your ability to deal with your affairs from the deadline until you acted, not just how you are today. HMRC also accept one from a voluntary organisation, such as Citizens Advice or TaxAid, that has satisfied itself from one of those sources that the condition is genuine.
  • A dated timeline covering, in HMRC's words, the time "from the point that the statutory obligation should have been carried out to the point when compliance occurred" (CH160900), backed by records from the time: hospital and appointment letters, emails, notes of calls with HMRC.
  • People's own accounts. In the caring case, the tribunal found the director and the company's accountants honest and credible.

If something doesn't exist, say so and offer what does: HMRC's guidance warns officers that what they ask for "may not actually exist", and tells them to be prepared to accept alternatives, allow time to collect evidence and suspend unnecessary contact, possibly including debt collection, meanwhile (CH160400).

What has failed: no medical evidence at all, with an account that records from the time didn't support, first raised after HMRC warned of a further penalty ([2022] UKFTT 155 (TC)); and medical dates that didn't match the payment dates ([2026] UKFTT 1100 (TC)).

How To Make Your Case To HMRC

For Self Assessment and other direct tax penalties, you appeal to HMRC first; where there's no appeal form, GOV.UK says: "Send a signed letter to the HMRC office related to your return. Explain why your return or payment was late, including dates." A VAT penalty letter offers a review or a tribunal appeal (VAT penalties).

Build your letter around the four questions HMRC's officers are told to ask (CH160400), adapted here:

  1. What was the condition or event, and when did it start and end?
  2. How did it affect your ability to manage your tax affairs?
  3. How did it affect your ability to deal or communicate with HMRC?
  4. Did anyone help you manage your tax, and what arrangements were in place?

Then say when things eased and what you did next, enclose your evidence (saying what is still to come), and ask for a special reduction if HMRC don't accept the excuse.

Penalty points. On an appeal against a new-regime £200 penalty, the tribunal can also cancel the points behind it, even if the time to appeal them has passed, unless a point was upheld on an earlier appeal (Sch 24 para 24(2)-(3) FA 2021).

A late appeal. For direct tax, HMRC must agree to one if you ask in writing and they're satisfied you had a reasonable excuse for not appealing in time and asked without unreasonable delay once it ended (section 49 TMA 1970); otherwise the tribunal decides (late appeals, including VAT).

Getting Help While You're Unwell

Extra support. HMRC's extra support includes help with forms, and GOV.UK says HMRC "can give you an extension to a deadline or spend more time with you on the phone"; someone else can ask if you're in hospital. GOV.UK doesn't say which deadlines, and asking doesn't by itself stop a penalty, but it leaves a dated record (Extra Support Team, whose webchat doesn't cover VAT).

Someone to act for you (GOV.UK): an accountant or tax adviser; an intermediary, such as a friend, relative or voluntary organisation, authorised by letter; or a power of attorney. A trusted helper (a friend or relative registered to manage your tax online) "cannot use this service to help you with your Self Assessment"; for short-term help with it, call HMRC with your helper beside you.

Relying on someone isn't an excuse unless you took reasonable care (Sch 55 para 23(2)(b) FA 2009): HMRC expect you to explain what you need, set deadlines and check progress (CH160700). If a sole or small-firm accountant falls ill or dies and, despite chasing, you only realise "within a couple of months or so of the deadline", HMRC's guidance accepts you may not be able to replace them in time.

Free help: TaxAid helps people who can't afford an adviser, "in most cases" those earning under £30,500; see also LITRG's guidance.

If HMRC Say No: Special Reduction

HMRC can reduce a penalty "because of special circumstances" even where there's no excuse, though not for inability to pay (for example Sch 55 para 16 FA 2009). New-regime late submission points and £200 penalties have no special reduction.

Illness that falls short of an excuse can still count: in [2022] UKFTT 401 (TC), the tribunal said circumstances arising after a default can be special circumstances, which can justify reducing the penalty, potentially to nil, but "they must do more than evoke sympathy; they must have some connection with the chain of events that led to the penalty being incurred or some other relevance to the penalty" ([67]).

The tribunal can change HMRC's decision on special reduction only if it was "flawed" in the judicial review sense (reducing HMRC penalties). In that case it was: HMRC had considered the appellant's health evidence only as an excuse, so the tribunal could decide the point itself ([66]), though on the facts it found none.

If illness left you with a determination (HMRC's estimate of your tax) that can no longer be replaced, see special relief. Interest isn't a penalty, so an excuse doesn't remove it.

At The Tribunal While You're Unwell

Many penalty appeals are decided on the papers unless someone asks in writing for a hearing; any reply to HMRC's statement of case must reach the tribunal within 30 days of HMRC sending it (preparing for your hearing). There is no fee to appeal, and each side normally pays its own costs.

Adjustments. Dealing with a case fairly includes ensuring, so far as practicable, that the parties "are able to participate fully in the proceedings" (rule 2(2)(c)), and the judges' Equal Treatment Bench Book suggests adjustments for mental disability such as video or phone hearings, breaks and a carer being present. That is guidance, not an entitlement: ask early, in writing. A friend or relative can come and, with the tribunal's permission, help present your case (rule 11(5); representation).

If you can't attend, write to the tribunal and HMRC as early as possible, with medical evidence, asking for a postponement or a video, phone or paper decision. Otherwise the hearing can go ahead without you (rule 33).

Privacy. Hearings are normally public (rule 32(1)), and published decisions usually name the parties (what the tribunal is). You can ask, in writing and as early as possible (ideally when you notify your appeal), with reasons and evidence, for an order that nothing likely to identify you is published (rule 14), or for all or part of the hearing to be in private (rule 32(2)(b)). It isn't automatic: the tribunal starts from open justice.

What To Do Now

  1. Check the date on the penalty notice: you have 30 days to appeal, and you won't have to pay the penalty until your appeal is settled. Missed it? Ask for a late appeal now.
  2. Still unwell? Ask HMRC for extra support, or authorise someone to act for you.
  3. Not filed or paid yet? Do it as soon as you can, or have someone do it: delay can cost you the excuse, and penalties keep growing.
  4. Write a dated timeline from the deadline to the day you filed, paid or told HMRC.
  5. Ask whoever treated you for a letter covering those dates and how your condition affected you. Don't wait for it to appeal.
  6. Write to HMRC answering the four questions, with your evidence, and ask for a special reduction in the alternative. For a VAT penalty, the letter offers a review: accept it, or appeal to the tribunal, within 30 days of the letter.
  7. If HMRC refuse, you have 30 days to accept their offer of a review or go to the tribunal; miss it and HMRC's decision stands unless the tribunal lets you appeal late. After a review, you have 30 days.
  8. At the tribunal, ask early, in writing, for any adjustments or privacy you need.

Key Legislation And Resources

Legislation

Key Cases

HMRC Guidance

  • CH160300: examples of reasonable excuse, including bereavement
  • CH160400: mental health, with the questions officers ask and the evidence they accept
  • CH160500: physical illness, caring and disability
  • CH160700: relying on someone else
  • CH160900: how HMRC establish whether there is a reasonable excuse
  • CH81120: reasonable care, for inaccuracy penalties
  • SACM12245: special relief for taxpayers who need extra support

GOV.UK Guidance

Further Help

On This Site

This article is for informational purposes only and does not constitute legal or tax advice. For advice specific to your situation, consult a qualified tax adviser, accountant, or solicitor.

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