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Reasonable excuse
Reasonable excuse
The test we adopt in determining whether the appellant has a reasonable excuse is that set out in theClean Car Co Ltd v C&E Commissioners [1991] VATTR 234, in which Judge Medd QC said:
"The test of whether or not there is a reasonable excuse is an objective one. In my judgment it is an objective test in this sense. 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?"
Although the Clean Car case was a VAT case, it is generally accepted that the same principles apply to a claim of reasonable excuse in direct tax cases.
Indeed, in the First-tier Tribunal case of Nigel Barrett [2015] UKFTT0329 (a case on late filing penalties under the CIS) Judge Berner said:
"The test of reasonable excuse involves the application of an impersonal, and objective, legal standard to a particular set of facts and circumstances. The test is to determine what a reasonable taxpayer in the position of the taxpayer would have done in those circumstances, and by reference to that test to determine whether the conduct of the taxpayer can be regarded as conforming to that standard".
- Heading
- INTRODUCTION
- THE LEGISLATION
- Special circumstances
- Reasonable excuse
- Reasonable excuse
- Special Circumstances
- THE EVIDENCE AND THE FACTS
- The tax returns were filed very late
- The fact that there was no tax liability in the years in which the tax returns were filed late, does not affect the validity of the penalties. This was made clear to the appellant in Judge Rankin’s de
- Similarly, we have no power to discharge or adjust a fixed penalty simply because we consider it to be unfair (see Hok Ltd v HMRC [2012] UKUT 363 (“ Hok ”) Reliance on an agent cannot be a reasonable excuse by dint of paragraph 23(2)(b) Schedule 55
- HMRC have not established that valid notices to file were served on the appellant
- Our view
- Conclusion
- Conclusions