D P Owens t/a Buses Rhiwlas v Commissioners for Her Majesty's Revenue and Customs
Decision date: 15 December 2010
Neutral citation: [2010] UKFTT 645 (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 whether a small bus operator took "reasonable care" under regulation 72 for PAYE underdeductions in tax years 2004-05 to 2006-07. The tribunal found lack of reasonable care for 2004-05 and dismissed the appeal for that year (with interest payable) but allowed the appeal for 2005-06 and 2006-07, concluding the employer had acted reasonably in those later years given the factual circumstances and HMRC’s lack of contact. The appellant acted in good faith throughout.
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 applied a year-by-year assessment of employer liability under regulation 72: whether condition A (reasonable care) is met must be determined for each tax year on its own facts, so a finding of unreasonable care in one year does not automatically determine subsequent years. An employer who files timely PAYE returns and continues previously used coding without being notified of changes by HMRC may, in appropriate factual circumstances, be found to have taken reasonable care.
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 indicate the tribunal commented that employers are not required to investigate employees’ private tax affairs and that standard information on forms like the P46 and routine guidance should prompt reasonable checks; also that HMRC’s failure to follow up or notify an employer about coding adjustments can be relevant to assessing the employer’s reasonableness in later years.