CCM10170 - Penalties and Interest: Failure to Notify Changes of Circumstances – Reasonable Excuse

Section 32(3) penalties will not be imposed where there is a reasonable excuse for a person’s failure to notify the change of circumstances. There is no statutory definition of reasonable excuse and you will need to judge each case on its own merits. The following are some of the situations that might constitute reasonable excuse:-

• the notification was lost or delayed in the post because of an unforeseen event disrupting the postal service for example fire or flood at the sorting office where the form would be held or prolonged industrial action
• serious illness preventing the person from handling their private affairs e.g. coma, major heart attack, stroke, serious mental or life threatening illness. If they are simply in hospital for a long time they must make arrangements to handle their affairs
• serious illness of close relative if it is taking up almost all of their time and attention
• bereavement of close relative or domestic partner

A reasonable excuse is not that they have been too busy or did not understand what was required.

Where there is a reasonable excuse for not notifying a change of circumstances the person is expected to meet their obligations as soon as it is reasonable to do so. Where you accept there is a reasonable excuse for not notifying a change of circumstance then there is deemed to have been no failure. This will not count as a failure for the purposes of calculating any future penalties.

See example at CCM10180.