Commentary

V5.378 Reasonable excuse for not dispatching return or remittance

Part V5 Compliance, enforcement and appeals

V5.378 Reasonable excuse for not dispatching return or remittance

V5.378 Reasonable excuse for not dispatching return or remittance

A person is not liable to default surcharge if he satisfies HMRC or, on appeal, a tribunal that he has a reasonable excuse for not dispatching the relevant return or remittance in reasonable time and manner for it to arrive by the due date1. Notice 700/50/16 (no longer in force) para 6.3 stated “genuine mistakes, honesty and acting in good faith are not reasonable excuses”, and in Garnmoss2 the Tribunal considered that “there was a muddle and a bona fide mistake was made. We all make mistakes. This was not a blameworthy one. But the Act does not provide shelter for mistakes, only for reasonable excuses”. However a later tribunal3 held that a mistake that has been made reasonably is, in principle, capable of being a reasonable excuse. But the mistake must meet two criteria:

  1.  

    •     the taxpayer must genuinely and honestly hold the belief asserted

  2.  

    •     that belief must be objectively reasonable

Thus, in the words of one tribunal4:

'A taxpayer who was well used to filing annual self assessment returns but was told by a friend one year in the pub that the annual filing requirement had been abolished might persuade a tribunal that he honestly and genuinely believed he was not required to file a return, but he would be unlikely to persuade it that the belief was objectively a reasonable one which could give rise to a reasonable excuse.'

A claim of reasonable excuse may be made on form WT25

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