Commentary

A4.568C Reasonable excuse—reliance on professional agent

Administration and compliance

A4.568C Reasonable excuse—reliance on professional agent

A4.568C Reasonable excuse—reliance on professional agent

For an overview of the concept of reasonable excuse, see A4.568. This article is concerned with the common practice whereby the taxpayer entrusts some or all of their tax affairs to an accountant, solicitor or other professional tax adviser and whether reliance on such a person can constitute a reasonable excuse. Such professional advisers are often described generically as agents, since they have authority to deal with HMRC on the taxpayer's behalf. Reliance upon third parties in other contexts is considered in A4.568D.

Note that this article does not discuss reliance on an agent in the context of whether the taxpayer has taken reasonable care in relation to an inaccuracy penalty. That commentary can be found at A4.532A.

Statutory provisions on reliance on a third party

All of the main penalty provisions make express provision in relation to reliance upon an agent. In relation to failure to notify, failure to file a document and failure to pay on time, it is provided that:

'where [the taxpayer] relies on any other person to do anything, that is not a reasonable excuse unless [the taxpayer] took reasonable care to avoid the relevant act or failure...1'

The statutory language focuses on the actions of the taxpayer rather than those of the agent. As long as the taxpayer acted reasonably in relying on the agent, they are not penalised for the agent's shortcomings, however serious they might have been. By the same token, the taxpayer cannot usually rely on an excuse relating

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