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HMRC internal manual

Air Passenger Duty

Penalties/interest and debt management: Reasonable excuse/mitigation

All the penalties in this section are subject to the reasonable excuse provisions of Finance Act 1994 Section 10 except for breach of walking possession. The reasonable excuseprovisions for the breach of walking possession are contained in Finance Act 1994 Section 11.

The Section 10 reasonable excuse provisions state that the following cannot be a reasonable excuse:

  • an insufficiency of funds to pay the duty or penalty; or
  • where reliance is placed on any person to perform any task including where the conduct of the person may have given rise to the penalty.

Section 11 allows ‘reasonable excuse’ for the breach of walking possession penalty but there is no specific exclusion for ‘insufficiency of funds’ or‘reliance on another person’. However, a Tribunal is likely to also adopt these criteria when considering ‘reasonable excuse’ for breach of walking possession penalties.

There is no mitigating provisions for APD penalties except for the evasion penalty. The aircraft operator can only appeal against the liability to the penalty (that is to try and establish a reasonable excuse) or the amount of the penalty, whether the penalty has been correctly calculated.

However, it may be possible for the aircraft operator to establish a reasonable excuse for part of the period of his conduct for which he has been penalised and this may result in a reduction of the penalty.