What is a reasonable excuse under section 149 of the Tax Collection and Management (Wales) Act 2016?

Under section 149, a person can avoid penalties for failing to comply with an information notice or obstructing the Welsh Revenue Authority if they demonstrate a reasonable excuse. This defence can be raised directly with WRA or before a tribunal on appeal. The excuse must be genuine and not simply a lack of funds or reliance on a third party without taking reasonable care.

Can a lack of funds be a reasonable excuse for non-compliance with a WRA information notice?

A lack of funds is generally not considered a reasonable excuse under section 149. However, there is an exception where the shortage of funds was caused by circumstances genuinely beyond the person's control. In all other cases, insufficient money alone will not provide a valid defence against penalties for non-compliance or obstruction.

Does delegating a task to another person provide a reasonable excuse if they fail to complete it?

Relying on another person to carry out a task is not automatically a reasonable excuse under section 149. The person who delegated the task must demonstrate that they took reasonable care to ensure the task was completed properly and that the failure or obstruction was avoided. Without such evidence, delegation alone will not constitute a valid defence.

What happens when a reasonable excuse ceases to apply under section 149?

If a person initially had a genuine reasonable excuse that later ceased, they are still treated as having the excuse provided they remedied the failure or stopped the obstruction without unreasonable delay. For example, if a flood destroyed records, the taxpayer must provide the information promptly once recovery is possible or risk losing the defence.

Tax Collection and Management (Wales) Act 2016 section 149

Reasonable excuse for failure to comply or obstruction

Section 149 sets out when a person can avoid penalties for failing to comply with an information notice or for obstructing the Welsh Revenue Authority (WRA), by demonstrating that they had a reasonable excuse.

A person will not be liable to a penalty under sections 146 or 147 if they can show WRA, or a tribunal on appeal, that they had a reasonable excuse for the failure or obstruction.
A lack of funds is not considered a reasonable excuse unless it was caused by events outside the person's control.
Relying on another person to carry out a task is not a reasonable excuse unless the person took reasonable care to avoid the failure or obstruction.
If a person had a reasonable excuse that later ceased, they are still treated as having the excuse provided they remedied the failure or stopped the obstruction without unreasonable delay after the excuse ended.

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