Missing the 60-day CGT return deadline produces an automatic £100 penalty. HMRC issues it without discretion. But the penalty can be overturned if you can demonstrate a reasonable excuse. For a breakdown of the full penalty stack and how to file a late return to stop the clock, see our guide to what happens when you miss the 60-day CGT deadline.
The penalty structure
The initial penalty for a late 60-day return is £100. This applies from day one after the deadline. There is no grace period.
After 3 months, daily penalties of £10 per day begin, up to a maximum of £900. After 6 months, HMRC adds 5% of the tax due (or £300, whichever is greater). At 12 months, another 5% (or £300) is added. The same structure applies at 12 months for continued failure.
The percentage penalties (at 6 and 12 months) require an underlying tax liability. If no tax is due, these do not apply.
Appealing the penalty
To appeal, you write to HMRC within 30 days of the penalty notice. The appeal must explain:
- that you are appealing the penalty
- the reasonable excuse for the late filing
- that you have now filed (or attach the return with the appeal)
HMRC will consider the appeal and respond. If HMRC rejects it, you can ask for a review by a different HMRC officer and, if still unsuccessful, appeal to the First-tier Tribunal.
What counts as a reasonable excuse
HMRC does not define "reasonable excuse" in statute, but case law has established the principle: a reasonable excuse is something outside your control that prevented you from meeting the obligation, and you acted without unreasonable delay once the obstacle was removed.
Common successful excuses include:
Serious illness. If you or a close family member had a serious and unexpected illness during the 60-day window that genuinely prevented you from dealing with the return, this is typically accepted. Routine illness or a slow recovery from minor surgery is unlikely to qualify.
Death of a close family member. Bereavement close to the deadline, where the affected person could not reasonably have been expected to file, is usually accepted. The closer the bereavement to the deadline and the more serious the relationship, the stronger the argument.
HMRC delays in providing access to the service. If you applied to register for the CGT on UK property service in good time but HMRC's registration process ran over the deadline, this is a good excuse. You need evidence of when you applied.
Postal failures. If correspondence from HMRC was lost in the post and you were not aware of the deadline as a result, this may qualify, though it is harder to evidence.
What does not qualify
Ignorance of the law, in isolation, is not a reasonable excuse. If you simply did not know the 60-day rule existed, HMRC is unlikely to accept the appeal unless there was a specific reason why you could not have been expected to know.
Being busy or finding the registration process difficult is not a reasonable excuse.
Not being informed by your solicitor. Courts have generally held that being unaware of the obligation (because a solicitor did not tell you) is not a reasonable excuse. You are expected to be aware of your tax obligations. This is one reason the 60-day window catches so many sellers off guard. HMRC learns about property sales through Land Registry data sharing, so a missed filing is unlikely to go unnoticed.
The suspension of daily penalties
Even while an appeal is pending, the penalty continues to accrue until the return is filed. Filing the return immediately, even if you believe the penalty was wrongly issued, stops the clock on further penalties while the appeal is resolved. Remember that interest on late CGT payments runs separately from penalties and begins accruing from the original payment due date.
Mitigation through special reduction
Even where there is no reasonable excuse, HMRC can apply a special reduction if the circumstances were genuinely exceptional and fall outside the standard reasonable excuse categories. This is rare and requires a specific argument rather than a standard appeal.
Avoiding penalties in future
The most reliable way to avoid a penalty is to file within the 60-day window. If your circumstances make that difficult, authorising an agent to act for you transfers the filing responsibility to the agent. The agent's failure to file on time would then be their fault rather than yours, though HMRC would still charge the penalty against the taxpayer initially.
LetsFile files returns within 24 hours of receiving the documents needed. We provide every customer with a confirmation of the filed return and the deadline that was met.