Reasonable excuse for late paid tax

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 late paid tax
  • Introduction
  • HMRC’s view
  • Coronavirus (COVID-19)
  • What is not a reasonable excuse?
  • What might be a reasonable excuse?
  • Insufficiency of funds as a reasonable excuse
  • Reliance on a third party
  • When does a reasonable excuse end?
  • Case law
  • More...

Reasonable excuse for late paid tax


If a penalty for late payment of tax 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 late payment of tax, see the Late payment penalties under self assessment and Late payment penalties for PAYE/NIC guidance notes.

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 the late filing of a tax return or the late payment of tax. HMRC’s guidance has been and 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 considers reasonable excuse to be something that stops a person from meeting a tax obligation despite them having taken reasonable care to meet that obligation. HMRC should review each claim for a reasonable excuse based on the particular circumstances.

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 Medd in The Clean Car Company. The HMRC guidance stresses that each case has to be considered separately, as circumstances that might give rise to a reasonable excuse for one person may not necessarily do so for another person. This was emphasised in Perrin, where the Upper

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