Reasonable excuse - recent tribunal action

There has been a lot of tribunal action recently regarding “reasonable excuse” for late filing of returns and some important developments:

  1. The European case of Jusilla v Finland established the principle that tax penalties demand the equivalent right to fair trial and “beyond reasonable doubt” evidential requirements as a criminal trial.  Tribunals will therefore seek proof that a return was delivered late from HMRC.
  2. In several First Tier Tribunal cases, including Runham v Naramore, the judges have ruled that they are not bound by HMRC’s construction of the term “reasonable excuse”.  The tribunal have held that HMRC’s application of the term is too strict and not in accordance with what was laid down by Parliament; the words should be given their ordinary, everyday meanings.

A summary of recent reasonable excuse tribunal cases is shown below:

           Cases won:           Cases lost:
Return lost in post:Lack of letterbox so unable to receive reminders:
Runham & Naramore v HMRC [TC00933]Rocco Mana t/a Spearmint Rhino Rouge v HMRC [TC01027]
Misleading written guidance provided by HMRC:Unsuccessful filing of returns online/No receipt of submission:
Humphreys v HMRC [TC00974]Hoar Cross Parish Council v HMRC [TC01217] v HMRC [TC01218]

Cashflow difficulties due to HMRC changing CIS status:Unspecified financial difficulties:
Kincaid v HMRC [TC01090]Impossible TV v HRMC [TC01266]
Unaware old employer did not deduct all tax from termination payment:Absence of part-time bookkeeper: 
Yusuf Budiadi v HMRC [TC01098]Grant Vehicle Repairs v HMRC [TC01273]
Misleading advice given by HMRC helpline:Lack of technical wherewithal to file online:
Dental IT v HMRC [2011] UKFTT 128

TJ Fisher (T/a The Crispin) v HMRC [2011] UKFTT 235
Kellswater v HMRC [TC01283]
Online filing difficultiesIllness did not coincide with period of default: 
Louise Fernandez v HMRC [TC01123]

NA Dudley Electrical Contractors v HMRC [TC01124]
RFL Consultants v HMRC [TC01284]
Genuine mistake – client thought accountant would be filing return:Ignorance of the law is no excuse:
Leachman v HMRC [TC01125]McCann v HMRC [TC01293]
Misleading advice on postal delivery times:Wrong payment method:
Alan Thomas Davies v HMRC [TC01165]Blue Forest v HMRC [TC01300]
Genuine belief filing had taken place:Administrative shortcomings did not constitute reasonable excuse:
 HMD Response v HMRC [TC01322Peacock Developments v HMRC [TC01338
Appellant’s computer system showed it made a successful filing:
Rushworths Furniture v HMRC [TC01327]
Unforeseen sudden hospitalisation of (sole practitioner) agent:
Tower Perkins Products and Services v HMRC [TC01328]


Don't accept HMRC's refusal of a reasonable excuse claim. 

Use the Tribunal if necessary.