Brian Lewis v Commissioners for Her Majesty's Revenue and Customs
Decision date: 9 July 2010
Neutral citation: [2010] UKFTT 327 (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 141 penalties imposed on Mr Brian Lewis for late monthly CIS returns for the period May 2007–April 2008; 133 returns were found to attract penalties under s98 TMA. The Tribunal rejected Mr Lewis's claimed reasonable excuses (lack of subcontractor tax references, workload, stress) and held fixed monthly penalties could not be reduced, but it exercised discretion to reduce the longer-term (post-12-month) discretionary penalties in aggregate, resulting in a substituted total penalty of £13,300. The appeal was dismissed in respect of fixed penalties and upheld only to the extent of moderating the post-12-month penalties.
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 held that where legislation prescribes fixed penalties for late returns (s98(2)(a) and s98A(3)(a)), the tribunal has no discretion to reduce those penalties; however, for penalties described as "not exceeding £3,000" for failures continuing beyond 12 months (s98(2)(b)), the tribunal may exercise a moderation discretion having regard to the circumstances and aggregate burden.
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 noted (obiter) that proportionality complaints against legislatively prescribed fixed penalties are matters for Parliament rather than for the tribunal to adjust, and observed that HMRC have verification processes to follow where a subcontractor's tax reference is not supplied, limiting the scope of a "reasonable excuse" based on absence of such a reference.