Mareel Limited v The Commissioners for HMRC
Decision date: 11 January 2023
Neutral citation: [2023] UKFTT 283 (TC)
Overall AI summary confidence: high
Short overview
This short overview is intended to summarise the case, issues and outcome so far as they are supported by the judgment.
AI confidence in this short overview: high
Mareel Limited appealed a HMRC 10% default surcharge of £64,119.53 for VAT period 06/21, arguing a prior surcharge liability notice (09/20) was not served, that it had a reasonable excuse for late payment, and that the surcharge was disproportionate. The tribunal found on the balance of probabilities the 09/20 notice was received by Mareel’s accountants, that Mareel did not establish a reasonable excuse (cashflow and Covid-related assertions lacked documentary support), and that the proportionality challenge failed. The appeal was dismissed and the surcharge upheld.
Ratio decidendi
This summary is intended to identify the ratio decidendi, meaning the legal reasons for deciding and the binding part of the decision.
AI confidence in this ratio decidendi summary: medium
The tribunal applied the statutory presumption of service: where a taxpayer accepts that a surcharge liability notice was dispatched, the presumption is not displaced absent evidence proving non-receipt or systemic postal delivery problems. Further, mere insufficiency of funds does not constitute a reasonable excuse unless the taxpayer adduces evidence of an underlying objective cause that would itself amount to a reasonable excuse.
Obiter dicta
This summary is intended to identify obiter dicta, meaning observations made by the way that were not necessary to deciding the case and are not binding.
AI confidence in this obiter dicta summary: medium
The tribunal observed that sending default surcharge notices by recorded delivery would reduce disputes about service and noted that a temporary "spike" in VAT liability does not, by itself, establish disproportionality; proportionality challenges will likely succeed only in wholly exceptional cases.