I'm very sorry to learn you have had these penalties levied on you. Another two examples of individuals who have tried to comply with their UK tax return filing obligations and in return have been charged penalties of a magnitude that will only encourage non-compliance.
If the system worked how I believe it was originally intended, you would each have received initial £100 late filing penalties and a warning that daily penalties would follow if the returns remained outstanding. You would then have filed the outstanding returns and that would have been the end of the matter.
Despite publishing statistics that suggest 80% of post is dealt with within 15 working days, the NRCGT appeal system is in meltdown with evidence to suggest in some cases it is taking 5 months for a decision to be reached. I have copied below a link which details examples of cases where appeals have been allowed including one in a situation similar to your own. I would write to your MP and continue to challenge these penalties.
HMRC are supposed to treat all taxpayers fairly and not discriminate between classes of taxpayers where to do so would be conspicuously unfair. They have already announced late filing penalties will not apply in the first year of Making Tax Digital (because it takes time for the public to become aware of what they have to do), but no such concession has been offered in respect of the NRCGT filing requirement. In my opinion that is discrimination on a level with the members at Muirfield Golf Club who due to public pressure have recently seen sense. Hopefully Mr Hammond will realise that when law abiding taxpayers are receiving fines of £6,400 the system is broken and needs fixing.
https://ion.icaew.com/taxfaculty/f/tax- ... gt-penalty
Good luck!
etf