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HMRC internal manual

Customs Civil Penalties Guidance

From
HM Revenue & Customs
Updated
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Reasonable excuse: what is reasonable excuse

A person will not be liable to a penalty if they have a reasonable excuse for a contravention.

There is no statutory definition of reasonable excuse, it “is a matter to be considered in the light of all the circumstances of the particular case” (Rowland v HMRC [2006] STC (SCD) 536 at paragraph 18). This was confirmed by the First Tier Tribunal, in Anthony Wood trading as Propave v HMRC (2011 UK FTT 136 TC 001010), in the judgement released on 23 February 2011.

A reasonable excuse is normally an unexpected or unusual event that is beyond the person’s control, and which prevents the person from complying with their obligations. A combination of unexpected events may, when viewed together be a reasonable excuse.

If the person can show that their conduct, which led to the contravention, was that of a reasonable business person, who accepted the need to comply with legal requirements, then there may be a reasonable excuse.

If the person could reasonably have foreseen the event, whether or not it is within their control, we expect the person to take steps to meet their obligations.

It is not possible to give a comprehensive list of what might be a reasonable excuse. Each depends on the particular circumstances in which the contravention occurred and the particular circumstances and abilities of the person who is responsible for the contravention. What is a reasonable excuse for one person’s circumstances may not be a reasonable excuse for another person in different circumstances.

If there is a reasonable excuse it must exist throughout the period of default.

The law does specify two situations that are not reasonable excuses. These are

  • a shortage of funds, but see the exception in CCPG11750, and
  • reliance on another person, but see the exception in CCPG11760.