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HMRC internal manual

VAT Civil Penalties

Breach of Walking Possession Order: Discretion, reasonable excuse and mitigation: Reasonable excuse

The following are examples of circumstances where it may be appropriate to accept areasonable excuse

  • The goods are accidentally damaged by fire, or vehicles involved in road accidents, where temporary removal has been authorised.
  • The goods are stolen by a third party.
  • Distress action is considered excessive because the value of the goods levied upon substantially exceeds the debt.
  • The goods are insufficiently detailed on Form C&E 1825 or they are perishable goods or stocks in trade which are subject to rapid turnover for example tobacco products, which were disposed of while they still had some value.
  • There was excessive delay between the date of levy and the date of the removal leading the trader to believe we had abandoned the distress.
    Note: It is feasible that the trader may believe the action to be abandoned and a court may also consider the distress to have been abandoned unless regular contact is maintained with the trader. It is however, a legal requirement that five clear calendar days (excluding the days of levy and sale) must elapse before sale of the goods
  • A time to pay arrangement has been agreed and the trader has reason to believe that the walking possession (distraint) agreement no longer applies.