There is a general understanding that there is no excuse for ignorance of the law. HMRC know this. However, is there such a thing as a 'reasonable excuse' when appealing late payment (of tax) and filing penalties which are prescribed by the law?
The answer is yes, but it depends...
According to AccountingWEB, 'reasonable excuse' is not defined by the law and so any excuses accepted by HMRC can sometimes appear subjective rather than being objective. This is especially the case now that HMRC staff are under pressure and have fewer resources; they tend to take their own view of 'reasonable' rather than looking up case law.
So what is acceptable?
Reasonable excuses include misleading advice on postal delivery times, online filing difficulties, genuine mistake, misleading and incomplete information, unaware old employer did not deduct all tax, insufficiency of funds, misleading HMRC advice, misleading information and lost in post.
Unaccceptable excuses - in the eyes of HMRC at least - include wrong payment method, lack of technical wherewithal to file online, ignorance of the law, absence of part-time bookkeeper, lack of letterbox and unspecified financial difficulties.
Now you know what to plead.
This was first published in August 2011