What is a 'reasonable excuse' in terms of making an appeal against a tax penalty for late filing, late payment or error?

A taxpayer may appeal a tax penalty when he is able to prove that he had a reasonable excuse for not doing what he was supposed to do.

Each case will be considered on its own merits.

See Appeals: Grounds for Appeal Toolkit

Read this in conjunction with our guide: How to appeal a tax penalty.

Reasonable excuse or reasonable care?

To avoid any confusion in terminology:

These include:

The defence of "reasonable care" is slightly different, although the two may cross over. 

What is a reasonable excuse?

"Reasonable excuse" is not defined by the legislation.

For a reasonable excuse to be made out there are only two requirements:

HMRC's original view was that an excuse is reasonable where some "unforeseeable and exceptional event" beyond the taxpayer's control is responsible for the compliance failure. Unsurprisingly the Tax Tribunal does not confine itself to such a narrow interpretation.

Excuses may include (but are not limited to):

See  Appeals: Grounds for Appeal Toolkit

What's new?

In May 2020 HMRC issued updated guidance on when taxpayers have a reasonable excuse for the late filing of returns or late payment of tax to specifically include being affected by Coronavirus. See Coronavirus is a reasonable excuse

Useful links:

Links to our guides on this topic are found in our Penalties & Compliance sections: