Guidelines for Appealing Tax Penalties with a Reasonable Excuse

Reasonable excuse for Welsh Revenue Authority penalties

A taxpayer may avoid or cancel some Welsh Revenue Authority penalties if they can show that something genuinely prevented them from meeting a tax obligation, that they had taken reasonable care to comply, and that they put things right as soon as possible afterwards. There is no fixed legal definition, so each case depends on its own facts and evidence.

• The WRA looks at whether an event actually stopped compliance, not just whether the taxpayer had a generally good reason.
• Possible reasonable excuses can include bereavement, serious illness, unexpected hospital stays, loss of records through fire, flood or theft, key staff loss, and unexpected IT, online service or postal problems.
• Explanations that will usually not be accepted include pressure of work, lack of information, no reminder from the WRA, ignorance of the law, a difficult return, mistakes, or lack of funds on its own.
• Relying on an adviser, employee or other person is not enough by itself unless the taxpayer took reasonable care to avoid the failure.
• A reasonable excuse cannot apply if the failure was deliberate, and the taxpayer must provide evidence and a clear timeline to support their case.
• Even if an excuse existed for a period, the taxpayer must file or pay without unreasonable delay once the problem ends, or the penalty may still apply.

Scroll down for the full analysis.

Reasonable excuse for Welsh Revenue Authority penalties

This page explains when the Welsh Revenue Authority may accept that a taxpayer had a reasonable excuse for failing to meet a tax obligation, such as filing a return late or paying late. This matters because a valid reasonable excuse can prevent or cancel certain penalties, but the test is fact-sensitive and depends on what actually stopped the taxpayer from complying.

What this rule is about

Some WRA penalties can be challenged if the taxpayer had a reasonable excuse for the failure. The idea is not that the taxpayer simply had a good reason in a general sense. The question is narrower: was there something that stopped them meeting a tax obligation that they had taken reasonable care to meet?

The source material makes clear that there is no fixed statutory definition of reasonable excuse. That means there is no complete checklist that automatically decides the issue. Instead, the WRA must look at all the circumstances of the particular case.

This is important because the same event may be a reasonable excuse for one person but not for another. The taxpayer’s own situation, abilities, and actions matter.

What the official source says

The WRA says a reasonable excuse is something that stopped the taxpayer meeting a tax obligation that they took reasonable care to meet.

The source gives examples of situations that the WRA may accept as a reasonable excuse for a period of time, depending on the facts. These include:

• bereavement, such as the death of a close relative or domestic partner around the time of the failure
• serious illness affecting the taxpayer or a close relative or domestic partner around the time of the failure
• an unexpected hospital stay that prevented the taxpayer dealing with their tax affairs
• loss of records through fire, flood, or theft
• an unexpected loss of key personnel
• computer or software failure just before or while preparing an online return
• unexpected disruption to the WRA’s online services
• postal delays that could not have been predicted
• delays related to the taxpayer’s disability

The source also lists matters that will not be accepted as a reasonable excuse, or will not generally be accepted. These include:

• reliance on another person, unless the taxpayer took reasonable care to avoid the failure
• a shortage of funds, by itself, preventing payment
• a mistake on the tax return
• saying the return was too difficult to complete
• pressure of work
• lack of information
• the fact that the WRA did not send a reminder
• ignorance of the law
• a combination of those points

The source adds an important qualification on shortage of funds. Although lack of money on its own is not enough, the WRA may consider the reason for the shortage if it arose from events outside the taxpayer’s control. In that situation, the WRA will consider whether the shortage could reasonably have been avoided.

The taxpayer has the burden of satisfying the WRA that they had a reasonable excuse at the relevant time. A reasonable excuse is not available where the failure or obstruction was deliberate.

Even where a reasonable excuse existed, the taxpayer must still comply as soon as possible after the excuse ends. If they do not put matters right without unreasonable delay, they remain liable to the penalty.

The WRA says there is no statutory definition of unreasonable delay either. That too depends on the facts of the case.

What this means in practice

In practice, there are usually three separate questions.

1. Was there an event or circumstance that genuinely prevented compliance?
2. Had the taxpayer taken reasonable care to meet the obligation in the first place?
3. Once the problem ended, did the taxpayer act without unreasonable delay?

A taxpayer will usually need to satisfy all three.

This means that simply showing that something difficult was happening is not always enough. For example, illness, bereavement, or system failure may support a reasonable excuse, but the WRA will still look at timing, seriousness, and what the taxpayer could realistically have done.

It also means that some commonly raised explanations are weak unless there is more to them. Saying that work was busy, the return was complicated, or no reminder was received will generally not help. The WRA expects taxpayers to make arrangements to meet their obligations without relying on reminders or hoping that ordinary pressures will excuse delay.

Where another person was involved, such as an adviser, employee, or agent, the source takes a cautious approach. Reliance on someone else is not, by itself, a reasonable excuse unless the taxpayer took reasonable care to avoid the failure. So the practical question is not just whether someone else let the taxpayer down, but whether the taxpayer had acted responsibly in relying on them.

For payment failures, lack of funds is also treated narrowly. If the taxpayer simply did not have the money, that will not normally excuse the penalty. But if the shortage arose from events outside their control, the WRA may look further and ask whether the position could reasonably have been avoided.

How to analyse it

A sensible way to assess a possible reasonable excuse is to work through the following points.

• Identify the exact obligation that was missed. Was it filing, payment, or something else?
• Pin down the relevant dates. When did the obligation arise, when did the problem begin, and when did it end?
• Ask what actually prevented compliance. The reason must be more than inconvenience or oversight.
• Consider reasonable care. What had the taxpayer done beforehand to try to comply?
• Look at evidence. Hospital records, death certificates, correspondence, IT records, proof of service disruption, or evidence of lost records may all matter.
• Check whether the failure was deliberate. If it was, reasonable excuse is not available.
• Examine what happened after the obstacle ended. Did the taxpayer file or pay promptly, or was there further delay?
• If there was delay after the excuse ended, ask whether that delay itself can be justified.

The burden is on the taxpayer. So a clear timeline and supporting evidence are often as important as the underlying event itself.

Example

Illustration: a taxpayer is due to file an online return. Two days before the deadline, they are unexpectedly admitted to hospital and remain there through the filing date. If that hospital stay genuinely prevented them dealing with their tax affairs, the WRA may accept that there was a reasonable excuse for that period.

But the analysis does not stop there. If the taxpayer is discharged and then does nothing for a long period without good reason, the original excuse may no longer protect them. The WRA will look at when the excuse ended and whether the taxpayer acted as soon as possible after that.

Why this can be difficult in practice

The hardest part is usually not identifying a potentially serious event. It is showing the link between that event and the failure to comply, and then showing prompt action afterwards.

Several points are especially fact-sensitive.

• Reasonable care: the source requires the taxpayer to have taken reasonable care to meet the obligation. That can be difficult to judge because it depends on the taxpayer’s circumstances and abilities.
• Reliance on others: there is no automatic rule that an adviser’s or employee’s failure excuses the taxpayer. The question is whether the taxpayer took reasonable care to avoid the failure.
• Shortage of funds: lack of money alone is not enough, but the underlying cause may matter if it was outside the taxpayer’s control and could not reasonably have been avoided.
• When the excuse ended: even if the original excuse is accepted, disputes can arise over the point at which the taxpayer could reasonably have acted again.
• Unreasonable delay: there is no statutory definition, so the WRA must assess the delay in context.

The source also reflects an important distinction between inability and difficulty. A return being hard to complete, work being busy, or the taxpayer not knowing the law will generally not amount to a reasonable excuse. The WRA is looking for something that actually prevented compliance, not something that merely made it harder.

Key takeaways

• A reasonable excuse depends on all the circumstances and there is no fixed legal definition.
• The taxpayer must show both that something prevented compliance and that they acted without unreasonable delay once the problem ended.
• Ordinary pressures, lack of reminders, ignorance of the law, and lack of funds on their own will usually not be enough.

This page was last updated on 24 March 2026

Useful article? You may find it helpful to read the original guidance here: Guidelines for Appealing Tax Penalties with a Reasonable Excuse

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