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HMRC internal manual

Excise Civil Penalties Manual

Reviews and appeals: Considering reasonable excuse

This page is designed to give guidance on the thought process used in consideration of reasonable excuse appeals. Some themes are common to all appeals and the table at ECP8240 provides examples of excuses offered and the sort of questions you should ask your self during your review.

The answers will help you build up a picture of the circumstances which led to the error or errors which have been penalised.

You need to keep in mind that whilst a taxpayer may offer several excuses which individually are considered to be unacceptable, when considered as a package a reasonable excuse may emerge.

The aim must always be to determine whether the excuse put forward demonstrates that the taxpayer acted in accordance with the actions of a ‘reasonably conscientious businessman’, see ECP8300. Remember that the individual circumstances of a particular case do not necessarily create a precedent.

In considering the grounds for reasonable excuse you will begin to form a judgement about the possibility of using your discretion as to whether or not to issue a civil penalty if one is appropriate, bearing in mind the alternative courses of action available.

You may also find the guidance on reasonable excuse in the Compliance Handbook useful, see CH92000 and CH71500.

Exceptions to reasonable excuse

The reasonable excuse provision within Section 10 of the Finance Act 1994 does not apply to certain contraventions of excise law. The relevant contraventions are

  • Section 170 CEMA - Contravention of handling goods subject to unpaid excise duty
    Note: Section 170A CEMA is repealed from 01 April 2010. Contraventions of handling goods subject to unpaid excise duty on or after 01 April 2010 are liable to a penalty under Schedule 41, Finance Act 2008. See ECP3900.
  • Section 114(2) CEMA - Use of prohibited substances in manufacturing, producing etc excisable goods
  • Section 22(1) HODA - Use of petrol substitutes on which duty has not been paid
  • Section 23(1) HODA - Use of road fuel gas on which duty has not been paid .