TC09679 - [2025] UKFTT 01331 (TC)

Fecha: 29-Oct-2025

Reasonable excuse

Reasonable excuse

(11)

A taxpayer is not liable to pay a penalty if he can satisfy HMRC, or this tribunal (on appeal) that he has a reasonable excuse for the failure to make the return (paragraph 23(1)).

(12)

However, an insufficiency of funds, or (broadly speaking) reliance on another, are statutorily prohibited from being a reasonable excuse. Furthermore, where a person has a reasonable excuse, but the excuse has ceased, the taxpayer is still deemed to have that excuse if the failure is remedied without unreasonable delay after the excuse has ceased (paragraph 23(2)).

CASE LAW

The relevant case law is set out below:

Notification of penalty

(1)

In order to visit a daily £10 penalty on a taxpayer under paragraph 4 of Schedule 55, HMRC must make a decision that such a penalty should be payable and give an appropriate notice to the taxpayer.

(2)

These issues were considered by the Court of Appeal in Donaldson v HMRC [2016] EWCA Civ 761 ("Donaldson").

(3)

The Court of Appeal decided that:

(a)

the high-level policy decision taken by HMRC that all taxpayers who are more than three months’ late in filing a return will receive daily penalties constituted a valid decision for the purposes of paragraph 4.

(b)

a notice given before the deadline (i.e. before the end of the three-month period (and so issued prospectively) was a good notice. In Mr Donaldson's case, his self-assessment reminder and the SA326 notice both stated that Mr Donaldson would be liable to a £10 daily penalty if his return was more than three months’ late and specified the date from which the penalties were payable. This was in compliance with the statute.

(c)

HMRC's notice of assessment did not specify, however, the period for which the daily penalties had been assessed. On this it agreed with Mr Donaldson. However, there is a saving provision in section 114(1) of the TMA 1970 which the Court of Appeal held applied to the notice. And so, they concluded that the failure to specify the period for which the daily penalties had been assessed did not invalidate the notice.