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HMRC internal manual

Inheritance Tax Manual

Procedures for taking penalties on late accounts: taxpayer claims reasonable excuse

If an account is late you must seek a penalty for late delivery. You should not assume without evidence that there is reasonable excuse (IHTM36061). It is for the taxpayer to put forward arguments for reasonable excuse and you should not put words in their mouths.

You must consider each case where an account is delivered late on its own merits, following the guidance in this section on what may or may not be a reasonable excuse. You should give careful consideration to any explanations received and test the explanation against information that you already hold. In some cases this may mean that even if an agent is acting you have to find out direct from the taxpayer the reasons for failure.

If the excuse is not acceptable you should inform the taxpayers or agents in writing and allow a suitable period for payment. If the taxpayers refuse to pay the penalty you should consider taking formal proceedings for recovery of a penalty (IHTM36052). In the event of disagreement the decision on whether or not a penalty is due will be for the First-tier Tribunal to decide.