B&M Retail Limited v The Commissioners for HMRC
Decision date: 10 January 2023
Neutral citation: [2023] UKFTT 34 (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
B&M appealed a Schedule 41 wrongdoing penalty imposed by HMRC in relation to excise duty on alcohol supplied by a third party (Ruby Trading). The Tribunal held the penalty valid, reduced it slightly to correct an agreed arithmetic error, and dismissed B&M’s claims that it had a reasonable excuse, special circumstances, that its disclosure was unprompted, or that the penalty was disproportionate. The Tribunal preserved B&M’s right to seek permission to appeal.
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 Schedule 41 penalties as being calculated by reference to the potential lost revenue (the duty due on the goods) rather than solely by reference to the original excise assessment, and held that an arithmetic error in that calculation does not automatically invalidate the penalty because the Tribunal can amend the penalty amount on appeal. The Tribunal also found that reasonable due diligence for excise goods requires steps to verify duty has been paid on particular supplies and to consider the supplier’s upstream chain, not merely checks or warranties regarding the immediate supplier.
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, without forming a binding rule, that comparisons with amendment powers in Schedule 55 are of limited assistance to interpreting Schedule 41, and comments that earlier First-tier decisions on time limits (e.g. Duncan Hansard) may be of limited precedential value on whether HMRC must withdraw and reissue penalties; the Tribunal’s substitution power is constrained by the types of decisions HMRC could make rather than by temporal limits.