Gilders Transport Limited v Commissioners for Her Majesty's Revenue and Customs
Decision date: 22 September 2010
Neutral citation: [2010] UKFTT 446 (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
Gilders Transport appealed default VAT surcharges imposed by HMRC for multiple periods where VAT payments were late, arguing "reasonable excuse" due to cashflow problems from DEFRA's delayed payments and reliance on HMRC advice. The Tribunal found a reasonable excuse for the period to 31 March 2008 (insufficiency of funds caused by DEFRA delays) and for three later periods (reliance on HMRC's incorrect telephone advice and a prior withdrawal of a surcharge), but dismissed the appeal for the period to 30 September 2008. The 30 September 2008 default was treated as the first default and its surcharge was recalculated at 2% (£1,946.36).
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
An insufficiency of funds can constitute a "reasonable excuse" for late VAT payment if the tribunal is satisfied the underlying cause explains the inability to pay on time; and reasonable reliance on incorrect official advice from HMRC, especially when coupled with a prior withdrawal of a surcharge, may also amount to a reasonable excuse preventing a surcharge.
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 notes suggest obiter points that a time-to-pay agreement entered after a default does not, by itself, prevent a default surcharge where the surcharge notice warned to that effect; and that HMRC officers can give incorrect advice which, if reasonably relied upon and not corrected, may be material to the fairness of surcharge enforcement.