VCP10431 - Belated Notification Penalty: Reasonable excuse: Legal provisions for reasonable excuse

Please see the Compliance Handbook CH70000 for more details about the new failure to notify penalty.

»Ê¹ÚÌåÓýapp VAT Act 1994, which introduced civil penalties, included a provision for ‘reasonable excuseâ€�. If HMRC are satisfied that that the trader has a reasonable excuse no liability to a belated notification penalty will arise

HMRC or the tribunal may also withdraw a penalty which has already been issued if a reasonable excuse can be established for the trader having failed to notify HMRC at the proper time

»Ê¹ÚÌåÓýapp VAT Act 1994 does not comment on what constitutes grounds of reasonable excuse, except that the following can not be considered to be reasonable excuse

  • an insufficiency of funds to pay any tax due
  • reliance placed on any other person to perform any task, or slowness or inaccuracy by that person.