Beta This part of GOV.UK is being rebuilt – find out what this means

HMRC internal manual

VAT Civil Penalties

HM Revenue & Customs
, see all updates

Mitigation Framework: Comparison between mitigation and reasonable excuse: Mitigation

Mitigation was introduced to allow greater flexibility when issuing and reviewing civil penalties and should always be considered where the trader does not have a reasonable excuse for the non-compliance.

When considering mitigation it is essential to look at all the facts of the case. This means that like reasonable excuse, complexity, unforeseen events and other circumstances can provide grounds for mitigation. However, unlike reasonable excuse, mitigation is available where there is a degree of reasonableness.

Reasonable excuse focuses on the behaviour that led to the error, whereas mitigation also allows subsequent behaviour to be taken into account. There is also a technical difference; where a reasonable excuse is accepted the assessed tax is no longer liable to a penalty. Mitigation reduces the penalty but the tax still due remains liable to a penalty.