A4.568F Reasonable excuse—personal difficulties
This commentary discusses when various personal difficulties might constitute a reasonable excuse.
This might include, but is not limited to, unexpected or unforeseen events such as sudden illness. Note, however, that there is no requirement in the legislation for the difficulty to be unexpected or unforeseen (or even unforeseeable), and similarly no need for it to be exceptional or unusual (as discussed at A4.568).
Can pressure of work be a reasonable excuse?
HMRC's position is that they will not normally accept pressure of work alone as a reasonable excuse for failure to notify, failure to file on time or failure to pay on time1. They also state that, 'a taxpayer claiming to be busy with other matters yet able to meet those obligations would not have a reasonable excuse for neglecting his tax obligations'2.
Broadly speaking, HMRC's position has been endorsed by the First-tier Tribunal and its predecessors. The taxpayer is expected to organise his working life so that they have adequate time to attend to their tax affairs. The Tribunal's approach was summed up in the late filing case GR8Green Ltd3. The judge cited an earlier decision to the effect that:
'an excuse is likely to be reasonable where the taxpayer acts in the same way someone who seriously intends to honour their tax liabilities and obligations would act4.'
The judge then applied this standard to the excuse advanced by the taxpayer's director, namely that a tax dispute between HMRC and a separate company with which he was involved had