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HMRC internal manual

VAT Civil Penalties

HM Revenue & Customs
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Default Surcharge: Discretion, reasonable excuse and mitigation: Computer breakdown or loss of records

This is unlikely to provide reasonable excuse for more than one or two periods. You shouldtake the following factors into consideration when considering appeals on these grounds

  • the precise dates of the computer failure/loss of records
  • the extent and effect of the breakdown/loss
  • was a backup system available to the trader
  • did the trader notify his local office of the situation prior to due date
  • did the trader estimate the tax due for the period and pay this before due date.