Dawn Kaffel v The Commissioners for HMRC
Decision date: 3 April 2025
Neutral citation: [2025] UKFTT 397 (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 challenged HMRC's refusal to grant a retrospective exception from compulsory VAT registration after Mrs Kaffel exceeded the threshold in October 2020. The Tribunal held HMRC lawfully exercised its discretion by assessing the trader's position as at the date of breach and the following 30 days and by taking into account the absence of measures in that period to reduce turnover. 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
A decision under paragraph 1(3) Schedule 1 VATA 1994 must be made by reference to the trader's affairs at the time the registration threshold was breached and the subsequent 30-day period; HMRC must be satisfied, from the facts known at that relevant time, that turnover would fall below the deregistration limit within the next 12 months, and may permissibly consider the absence of measures taken in that period to achieve that result.
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 judgment suggests taxpayers need not prove specific measures were already taken, but mere personal belief that turnover will fall is not the statutory test; HMRC's use of a questionnaire to ask why a taxpayer thought turnover would return below the limit is an appropriate way to elicit relevant information.