CH193180 - penalty reform: penalties for failure to pay VAT on time from 1 January 2023: reasonable excuse

NB: “These rules currently only apply to VAT, for VAT periods starting on or after 1 January 2023. These rules will come into force for other tax regimes at a future date. You must check the date from which these rules apply for the tax or duty you are dealing with”

A person will not be liable to a late payment penalty if they had a reasonable excuse for not paying their tax on time and they remedy that failure without unreasonable delay once the period covered by the reasonable excuse ends.

There is no statutory definition of reasonable excuse. Please see CH160000 for further guidance on reasonable excuse.

FA21/SCH26/PARA12