Scott Macarthur v The Commissioners for HMRC
Decision date: 24 November 2023
Neutral citation: [2023] UKFTT 997 (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
This appeal concerned a Schedule 41 penalty of £217.08 for failure to notify liability to the High Income Child Benefit Charge (HICBC) for 2017/18. The tribunal found the appellant had received HMRC's 14 Nov 2019 nudge and 13 Dec 2019 final reminder, did not act until after a 2022 discovery assessment, and therefore had no continuing reasonable excuse or special circumstances. The appeal was dismissed and the penalty 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
Ignorance of the law can in some circumstances constitute a reasonable excuse, but where HMRC has provided directed, clear communications that put a taxpayer on notice (here, nudge and final reminder letters explaining adjusted net income includes benefits and directing to gov.uk guidance), any ignorance ends upon receipt and the taxpayer must act without unreasonable delay; failure to do so permits imposition of the Schedule 41 penalty.
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 endorsed and applied the Perrin/Clean Car Co objective four-step approach to assessing reasonable excuse and noted that taxpayers are more likely to have a reasonable excuse where they were not previously under self-assessment obligations, received no direct HMRC notification, and acted promptly once contacted; receipt of a nudge letter is likely to negate that excuse.