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HMRC internal manual

Compliance Handbook

From
HM Revenue & Customs
Updated
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Penalties for Failure to Pay on Time: reasonable excuse: how will HMRC be satisfied a reasonable excuse exists

You will have to establish how a failure occurred in order to decide whether the circumstances surrounding that failure provide the person with a reasonable excuse for the late payment.

There are many different circumstances that may represent a reasonable excuse for a failure to pay on time. Each case must be considered on its own merits and you need to take into account a person’s abilities, circumstances and experience.

The onus is on the person to satisfy you that they have a reasonable excuse. They must tell you the reason and you must listen carefully to what they tell you. You should consider the explanation carefully taking into account all the circumstances and available information.

The circumstances of each individual case will determine whether you need supporting evidence and, if so, what that will be.

You must ensure that any request for evidence you make is reasonable and proportionate. If you need to ask for information you must apply this guidance in conjunction with the HRA procedures at CH21360.

Whether there is a reasonable excuse is a matter of judgement.

  • If you consider the excuse to be reasonable you must accept it.
  • If you do not consider that the person’s arguments represent a reasonable excuse then you must tell the person and give them the opportunity to provide further argument and/or evidence as to why they have a reasonable excuse before you give notice of your decision. Your letter notifying the person of your decision must also advise them of their appeal and review rights in accordance with the Appeals, Reviews and Tribunals Guidance at ARTG2100+ for direct taxes and ARTG3000+ for indirect taxes. ARTG15000 contains standard wording for decision letters.