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HMRC internal manual

Enquiry Manual

HM Revenue & Customs
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SA Surcharge: Appeals - Reasonable Excuse


TMA70/S59C only applies to the 2009-10 tax year, and any previous tax year.

See CH155000+ for 2010-11 and subsequent tax years

As set out in EM4108, to succeed in an appeal against a surcharge the taxpayer needs to demonstrate that he had a reasonable excuse throughout the period of default, that is from the date the tax became due and payable (not the later surcharge trigger date) to the day before payment was made.

For example

A taxpayer whose reasonable excuse begins with a dramatic event on 5 February cannot succeed in an appeal against a surcharge on tax that was due on 31 January. His reasonable excuse does not exist throughout the period of default.

TMA70/S59C(10) specifically rules out inability to pay, a means problem, from being a reasonable excuse for this purpose.

Reasonable excuse in connection with failure penalties at EM5152 applies equally to surcharges.

A reasonable excuse is something that stopped the taxpayer from meeting a tax obligation on time that they took reasonable care to meet. It might be due to circumstances outside of their control or a combination of events. Once the reasonable excuse has ended, the taxpayer must put things right without any unnecessary delay.

For example

An unfortunate taxpayer seriously injured in a road traffic accident and in a coma from late January would unquestionably have a reasonable excuse. Someone suffering a close and sudden family bereavement would also normally have a reasonable excuse.

A taxpayer claiming to be busy with other matters yet able to meet those other obligations would not have a reasonable excuse for neglecting his tax obligations.

Other examples are given in the Self Assessment Manual (SAM).

HMRC do not regard an agent’s failure to do something (such as convey payment) as giving the taxpayer a reasonable excuse. It is reasonable to expect the principal, the taxpayer, to check that his agent has carried out his instructions. However see EM4110 for details of Rowland v HMRC (SPC548/06).