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HMRC internal manual

Compliance Handbook

HM Revenue & Customs
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Penalties for VAT and Excise Wrongdoing: in what circumstances is a penalty payable: reasonable excuse: what is not a reasonable excuse

A person may have a reasonable excuse for a non-deliberate VAT or excise wrongdoing.

While you must consider all relevant circumstances, there are some situations which we will not normally accept alone as a reasonable excuse.

  • Pressure of work.
  • Lack of information.
  • Ignorance of basic law.

What is or is not a reasonable excuse is personal to the individual’s abilities and circumstances. Those abilities and circumstances may mean that what is a reasonable excuse for one person may not be a reasonable excuse for another.

The law specifies two situations that are not reasonable excuses. These are

  • Shortage of funds, see CH92300 for more detail and an exception, an
  • Reliance on another person, see CH92350 for more detail and an exception.

FA08/SCH41/PARA20 (2)(a) & (b)