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HMRC internal manual

VAT Civil Penalties

Belated Notification Penalty: Reasonable excuse: Compassionate circumstances

Please see the Compliance Handbook CH70000 for more details about the new failure to notify penalty.

Where an individual is totally responsible for the running of a small business, such as a sole proprietor or family partnership, you should consider reasonable excuse for

  • serious illness, or
  • periods of recuperation from illness.

Consideration should be applied to the trader or a member of their immediate family or the trader’s bookkeeper when a reasonable excuse is provided for the time when notification of liability to be registered was required

The period of time allowable for the reasonable excuse should only cover the period of the illness or recuperation

If the bookkeeper’s illness is prolonged, for example two months or more, the trader should normally be expected to make other arrangements and reasonable excuse should only be allowed for a limited period

Note: In this case the penalty should be mitigated to take into account the period of illness, see VCP10445 for guidance on mitigation