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Record-keeping and accounting systems

Most of the circumstances in this category relate to inaccuracy in a return or other document and whether the taxpayer has taken reasonable care (see A4.532A).

If the taxpayer has difficulty in compiling the information to put in a return, that will not usually amount to a reasonable excuse for late filing or late payment; instead, they should estimate the figures as best they can and state on the face of the return that they have done so¹.

Loss of records

Occasionally there will be extreme cases in which, through no fault of the taxpayer, the deficiency in the records is so serious that they cannot compile returns even on an estimated basis. Hence HMRC's officers are instructed that they²:

'...should normally agree as a reasonable excuse loss of records through fire, flood or theft, although [HMRC] should be satisfied that the information for completion of the return could not be replaced in time for the [taxpayer] to complete