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HMRC internal manual

Employee Tax Advantaged Share Scheme User Manual

From
HM Revenue & Customs
Updated
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Introduction to Tax Advantaged Share Schemes: Annual returns: Reasonable excuse

If a company files a return after the required deadline and does not have a “reasonable excuse”, it will have to pay a penalty. “Reasonable excuse” is not defined in the legislation.  What is “reasonable” will differ from person to person depending upon their particular circumstances. The law provides that the following are not “reasonable excuses”:

  • lack of funds to pay, unless attributable to events outside the company’s control, and
  • delay and / or inaccuracy by any person relied on to perform any task, unless the company took reasonable care to avoid the failure.
  • Where the company has a reasonable excuse for failing to meet the filing deadline but that excuse ceases, the company is treated as having continued to have the excuse if it remedies the failure without unreasonable delay after the excuse ceased (paragraphs 81C(9) Schedule 2, 40C(9) Schedule 3, 28C(9) Schedule 4 and 421JC(9) Part 7 ITEPA).