{"id":21787,"date":"2022-02-10T15:43:35","date_gmt":"2022-02-10T15:43:35","guid":{"rendered":"https:\/\/smh.group\/?p=21787"},"modified":"2023-02-15T13:20:52","modified_gmt":"2023-02-15T13:20:52","slug":"what-is-a-reasonable-excuse-for-tax-penalties","status":"publish","type":"post","link":"https:\/\/devstagesite.co.uk\/smhgroup\/what-is-a-reasonable-excuse-for-tax-penalties\/","title":{"rendered":"What is a \u2018reasonable excuse\u2019 for tax penalties?"},"content":{"rendered":"

Having a reasonable excuse can be a get-out-of-jail-free card if you are charged a tax penalty. However, there is no statutory definition of the term, and what might constitute a reasonable excuse for one person may not for another. With more individuals and businesses incurring tax penalties due to Covid-related disruptions, HMRC has recently updated its guidance.<\/strong><\/p>\n

The use of a reasonable excuse only removes the penalty \u2013 it does not absolve the taxpayer from the tax<\/strong><\/span><\/a> or any late-payment interest.<\/p>\n

Covid-related disruptions <\/strong><\/h2>\n

HMRC will usually accept the use of a reasonable excuse for a return or late payment because of the impact of Covid-19. As is always the case with reasonable excuse, the excuse must have existed on or before the date on which the obligation should have been met.<\/p>\n

It is also essential that the failure to meet the conditions is rectified without unreasonable delay once the reasonable excuse ends.<\/p>\n

For example, if a business is late submitting its quarterly VAT return<\/strong><\/span><\/a> because the person responsible had to isolate \u2013 this should be accepted as reasonable excuse provided the return is submitted as soon as possible after the person returns to work.<\/p>\n

What doesn\u2019t count<\/strong><\/h2>\n

HMRC\u2019s updated guidance provides some examples of what will not usually amount to a reasonable excuse:<\/p>\n