NIM37004 | Refunds: Class 1 NICs: Reasonable excuse

There is no statutory definition of ‘reasonable excuse’. HMRC considers a reasonable excuse to be something that stops a person from meeting an obligation on time despite them having taken reasonable care to meet that obligation.

When considering if there is a reasonable excuse you must always look at the circumstances in which the failure or irregularity occurred, as well as the particular circumstances and abilities of the individual.

The test is to consider what a reasonable person, who wanted to comply with their tax obligations, would have done in the same circumstances and decide if the actions of the person met that standard.

You may want to use the following suggested wording.

“Whether a person has a reasonable excuse depends on the particular circumstances in which the failure occurred, as well as the particular circumstances and abilities of the person who has failed in their obligation. The test is to consider what a reasonable person, who wanted to meet their tax obligations would have done in the same circumstances and decide if the action of the person met that standard.

I have considered [insert what you have considered]”

As with other decisions you must ensure you record the factors you have considered, along with the reasons and any evidence for your decision on reasonable excuse, even if you decide there was not one.

See CH160000 for additional guidance about reasonable excuse.