Up to 890,000 filed late tax returns but have been let off paying a £100 fine for missing the deadline, the tax office has confirmed.
It adds that the penalty has only been waived for individuals who provided a “reasonable” excuse for being late.
But this has angered thousands who paid on time or who simply object to a government body allowing others to get away without paying.
Among those who bombarded the BBC website was one who said: “Am I understanding the numbers here? 890,000 people have dreamed up a “reasonable excuse” for not doing something that they knew they would have to do many months prior like the rest of us.”
A spokesman for HMRC said it wanted to focus more resources “on investigating major tax avoidance and evasion”.
The Daily Telegraph reveals that an internal memo asks tax officials to remit fines without further investigation for those people who could show mitigating circumstances, and who appealed against the fine after their tax return was sent in.
HMRC is facing a backlog of almost a million letters and staff have been taken off call centre duties to work through the mail, according to the paper.
The deadline for self-assessment returns was midnight on 31 January.
The Telegraph quotes the memo as saying: “Our penalty regime is intended to influence customer behaviour, but also be clear and cost-effective, fair and proportionate.
“The current way of managing penalties does not meet these objectives, and so we have decided to take a more proportionate approach where a customer has filed their return late, and then appealed against their penalty…
“This means that in the vast majority of cases we will be accepting the customer’s grounds for appeal, and we can cancel the penalty.”
The list of acceptable excuses listed on the HMRC website include the death of a family member, a stay in hospital, a computer failure, fire, or postal delays.
A HMRC spokesman said it had “always accepted” those with a reasonable excuse should have a penalty waived, and it was now “expediting that process”.
A statement added: “We’ve been clear we want to focus more and more of our resources on investigating major tax avoidance and evasion rather than penalising ordinary people who are trying to do the right thing.
“But no one will be let off the fine unless they’ve now sent in their return and have a good reason for sending it in late.
“This is part of our planned approach to penalty appeals, particularly for small businesses and individuals who have sent their tax return in late.”