Reasonable excuse for failure to notify

Produced by Tolley in association with Philip Rutherford

The following Owner-Managed Businesses guidance note Produced by Tolley in association with Philip Rutherford provides comprehensive and up to date tax information covering:

  • Reasonable excuse for failure to notify
  • Introduction
  • HMRC’s view
  • Coronavirus (COVID-19)
  • What is not a reasonable excuse?
  • What might be a reasonable excuse?
  • When does a reasonable excuse end?
  • What is the attitude of HMRC to late notification where there is no reasonable excuse?
  • Case law
  • How to appeal a penalty for failure to notify

Reasonable excuse for failure to notify


If a penalty for failure to notify has been correctly charged by HMRC, the taxpayer can only appeal if they believe they have a ‘reasonable excuse’ for failing to comply with the legislation. For details of the penalties for failure to notify, see the Penalties for failure to notify guidance note.

Reasonable excuse is provided for the late notification for all taxes by FA 2008, Sch 41, para 20. For the full list of taxes to which the rules apply, see the final page of HMRC factsheet CC/FS11.

The term ‘reasonable excuse’ is not defined in the legislation and therefore the meaning is continually being reassessed by the courts and should be seen ‘in light of all the circumstances of the particular case’.

Historically, HMRC took a very hard line on what constituted a reasonable excuse for late notification. HMRC’s guidance used to refer to exceptional circumstances and, while this has been removed from the guidance, it continues to be very restrictive on the circumstances in which a taxpayer can claim reasonable excuse. Recent case law has, in many cases, been very different from the expressed views of HMRC.

This guidance note considers the concept of reasonable excuse. For commentary on how to build a case for reasonable excuse, see the Winning reasonable excuse cases guidance note.

HMRC’s view

HMRC should review each claim for a reasonable excuse based on the particular circumstances. HMRC expects that a taxpayer who has a reasonable excuse will rectify the failure to notify within a reasonable time of the reasonable excuse ending.

In order to decide whether the excuse is reasonable, it is necessary to consider what a reasonable person who wanted to meet their obligation would have done in the same circumstances and decide if the action of the person met that standard as outlined by Judge Med

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