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HMRC internal manual

Compliance Handbook

Penalties for VAT and Excise Wrongdoing: in what circumstances is a penalty payable: reasonable excuse: reliance on another person

Where a person has asked somebody else to do something on their behalf, that person is responsible for ensuring that the other person carries out the task correctly. They cannot claim they had a reasonable excuse merely because they delegated the task to a third party and that third party failed to complete it correctly.

We expect the person to take reasonable care to explain to the third party what they require them to do, to set deadlines for the work and to make regular checks on progress, reminding where appropriate. We expect the person

  • to be able to tell us what action they took to ensure that the third party carried out the task correctly, and
  • normally, but not always, to know the reason why things went wrong.

If the person does this but a wrongdoing still occurs because of what the third party does or does not do, they may have a reasonable excuse. However, the person must remedy the wrongdoing without unreasonable delay after the excuse has ended, see CH92400.

Remember, there is no statutory definition of ‘reasonable’ or ‘unreasonable’. Each case must be judged on its own merits in view of the person’s abilities and circumstances. See CH92100 and CH92150.