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HMRC internal manual

Debt Management and Banking Manual

Debt and return pursuit: PAYE: E-payment default appeals: Reasonable excuse

Regulation 201(3) of the Income Tax (PAYE) Regulations 2003 states that an employer is not in default if they had a ‘reasonable excuse’ for paying late and they paid in full without unreasonable delay after the excuse ceased. Inability to pay is not a reasonable excuse for the purposes of this appeal.

Some other circumstances may well be valid, such as loss or destruction of PAYE records due to some unexpected or unusual event that could not be reasonably foreseen or is beyond their control, as long as payment in full was made ‘without unreasonable delay’, that is within days after the ‘reasonable excuse’ ended.

‘Without unreasonable delay’ is the crux of the decision in these cases and should be interpreted as ‘within only a few days’.

‘Reasonable excuse’ is a very subjective issue and each case must be considered on its own merits. More background on ‘reasonable excuse’ has been extracted from ECH21035 and is reproduced here.

“The reasonable excuse must cover the whole period of lateness.



  • Reasonable excuse cannot be defined in absolute terms. The reasonableness will vary from case to case.

Generally you are looking for some

circumstance which





* is beyond the employer’s control and  
* made the failure unavoidable and



  • evidence that the failure was remedied without unreasonable delay once that obstacle was out of the way.”