EM5171 - Penalties: Culpability - Defences: Failure to Make a Return - Unacceptable Reasons

The HMRC view is that a reasonable excuse is something that stops a person from meeting a tax obligation despite them having taken reasonable care to meet that obligation. 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 (LON/90/138X)

‘One must ask oneself: was what the taxpayer did a reasonable thing for a responsible trader conscious of and intending to comply with his obligations regarding tax, but having the experience and other relevant attributes of the taxpayer and placed in the situation that the taxpayer found himself at the relevant time, a reasonable thing to do? Put in another way which does not I think alter the sense of the question; was what the taxpayer did not an unreasonable thing for a trader of the sort I have envisaged, in the position that the taxpayer found himself, to do?’

The taxpayer has many months to complete their return.

You should therefore not accept as a reasonable excuse

• the tax return is too difficult
• my affairs are complicated
• pressure of work
• failure by the agent
• delays in the post, unless there was an exceptional event disrupting the postal service
• insufficient records.

See CH160000 for detailed guidance on reasonable excuse.