TC09578 - [2025] UKFTT 00856 (TC)

Fecha: 09-Jun-2025

Reasonable excuse

Reasonable excuse

32.

Paragraph 16, Sch. 56 provides that a penalty does not arise in respect of the late payment if there is a reasonable excuse for the late payment and the failure to make the payment was rectified without unreasonable delay after the excuse had ended.

33.

There is no statutory definition of “reasonable excuse”.

34.

In Rowland v Revenue & Customs Commissioners [2006] STC (SCD) 536 at [19] the Tribunal stated that the issue was to be considered in the light of all the circumstances of the particular case. In The Clean Car Company Ltd v The Commissioners of Customs and Excise [1991] VATTR 234, Judge Medd QC set out that the test is an objective one, where the Tribunal must ask itself: “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?”

35.

In Christine Perrin v HMRC [2018] UKUT 0156 (TCC) (“Perrin”), the Upper Tribunal set out the approach to take when considering “reasonable excuse,” at [81]:

81.

When considering a “reasonable excuse” defence, therefore, in our view the FTT can usefully approach matters in the following way:

(1)

First, establish what facts the taxpayer asserts give rise to a reasonable excuse (this may include the belief, acts or omissions of the taxpayer or any other person, the taxpayer’s own experience or relevant attributes, the situation of the taxpayer at any relevant time and any other relevant external facts).

(2)

Second, decide which of those facts are proven.

(3)

Third, decide whether, viewed objectively, those proven facts do indeed amount to an objectively reasonable excuse for the default and the time when that objectively reasonable excuse ceased. In doing so, it should take into account the experience and other relevant attributes of the taxpayer and the situation in which the taxpayer found himself at the relevant time or times. It might assist the FTT, in this context, to ask itself the question “was what the taxpayer did (or omitted to do or believed) objectively reasonable for this taxpayer in those circumstances?”

(4)

Fourth, having decided when any reasonable excuse ceased, decide whether the taxpayer remedied the failure without unreasonable delay after that time (unless, exceptionally, the failure was remedied before the reasonable excuse ceased). In doing so, the FTT should again decide the matter objectively, but taking into account the experience and other relevant attributes of the taxpayer and the situation in which the taxpayer found himself at the relevant time or times.”