Intrastat Supplementary Declarations – reasonable excuse?

I have always believed that if you had a reasonable excuse for having failed to submit you Intrastat SD on time, then Customs would not penalise you. I’m now told that, except for some very strict ‘events’, there is no such thing as ‘reasonable excuse’.   Is that correct? A.         Yes and no, I’m afraid. The  term 'reasonable excuse' is not defined in law and excuses accepted by HMRC tend to be those which they consider to be reasonable, e.g. mainly those events which are unforeseeable or unusual and beyond your control, although they do say that they will look closely at the circumstances of each case. According to HMRC, a reasonable excuse might involve: a failure in the HMRC computer system, your computer breaks down just before or during the preparation of your online return, a serious illness, disability or serious mental health condition has made you incapable of filing your SD, documents being lost through theft, fire or flood, electrical faults, These are pretty strict examples and could only be invoked if one of the problems listed stopped you from submitting your data. However, each case should be considered on its merits. Other ‘excuses’ have been accepted in the past, such as misleading advice on postal delivery times, or the previous incumbent in the job had failed to let you know that a declaration was due, but these seem a touch tenuous, especially as HMRC emails a reminder about your SD if you’re part of their ‘Alert Service’ . Reasonably enough, HMRC will not accept an excuse as ‘reasonable’ if you haven't made a reasonable effort to submit your data on time. They quote the following as fairly obvious unacceptable examples. You: found the online system too complicated to follow, left everything to your accountant to do and they let you down (NB In this case the law provides specifically that you do not have a reasonable excuse if you relied on someone else to perform any task for you), forgot about the submission deadline, or did not try to re-submit your SD on time once a problem with the IT system was put right .  However, a number of recent First Tier tax tribunals have overturned HMRC’s concept of what constitutes a ‘reasonable excuse’. Excuses tendered for late filing of tax returns, for instance, have been supported by the courts as reasonable, using European Court of Human Rights rulings, supporting the argument that HMRC’s idea of ‘reasonable excuse’ was based on some exceptional circumstance and therefore ‘unreasonable’. In fairness, HMRC do say that if you can show that your conduct was that of a conscientious business person who accepted their compliance obligations, then there may be a reasonable excuse. Remember that HMRC state that genuine mistakes, honesty and acting in good faith are not accepted as reasonable excuses for penalty purposes. But don’t immediately accept HMRC’s decision if you feel you have a valid reason for, say, submitting your SD late. Courts have been showing a trend towards business-friendly rulings, adopting a commercial approach to what is reasonable and this could ‘colour’ HMRC’s opinion. However, remember, ignorance is still no excuse, unless I suppose you can prove that HMRC withheld the knowledge that would have allowed you to comply, but that’s probably unlikely… the small print will find you out! You should make every effort to comply and not rely on the excuse that you had to vacate your premises unexpectedly, due to a plague of locusts… unless of course that’s what happened!