London Clean Limited v The Commissioners for HMRC
Decision date: 9 June 2022
Neutral citation: [2022] UKFTT 196 (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
London Clean Ltd appealed a £604.81 VAT default surcharge for a four-day late payment for period 06/21, arguing COVID‑19 disruptions, staff illness/isolation and accountant unavailability amounted to a reasonable excuse. The Tribunal found the company had approved and submitted an accurate return, produced no contemporaneous evidence or accountant statement, and concluded the business pressures did not objectively amount to a reasonable excuse. 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: high
Where a taxpayer approves and submits an accurate VAT return, timely payment is ordinarily required and subsequent queries that do not alter the return do not justify delay; general business distraction or COVID‑related pressures, particularly where the taxpayer was on notice from prior surcharge history, do not, without stronger supporting evidence, constitute an objectively reasonable excuse for late payment.
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 the absence of contemporaneous communications and lack of evidence from the accountant weakens a reasonable‑excuse claim, and that reliance on another person’s unavailability (eg an accountant) is unlikely to amount to a reasonable excuse absent stronger evidence.