Shaw Cleaning Services v Commissioners for Her Majesty's Revenue and Customs

Decision date: 9 June 2011

Neutral citation: [2011] UKFTT 378 (TC)

Overall AI summary confidence: high

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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 whether Shaw Cleaning Services and its partners satisfied the Schedule 11 compliance test for gross payment status under the CIS, following late payment of personal income tax liabilities. The Tribunal held the partnership and each partner failed the compliance test, finding no reasonable excuse for the late payments and that time to pay arrangements were not in force before the due dates so the late payments could not be ignored. The appeal was dismissed.

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

The Tribunal treated as determinative that any time to pay arrangement must be in effect before the tax due date for HMRC to treat a late payment as disregarded for the compliance test; mere later agreement does not cure earlier default. Further, insufficiency of funds or cash‑flow problems do not constitute a reasonable excuse for late tax payment unless caused by an unforeseeable or inescapable event; ordinary overdrafts and drawings by partners do not absolve responsibility.

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 indicated, without treating it as decisive, that the consequences of cancellation of gross payment status are irrelevant to whether there was a reasonable excuse, and that an earlier General Commissioners decision accepting cash‑flow problems for another purpose was not dispositive here.

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