Desser & Co Ltd v The Commissioners for HMRC
Decision date: 28 July 2023
Neutral citation: [2023] UKFTT 662 (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
Desser & Co Ltd appealed a £4,662.19 VAT default surcharge for period 12/20. The Tribunal found the company was in statutory default because no Time-to-Pay arrangement had been agreed and it had not validly requested or allocated earlier payments to the 12/20 liability before submitting the 12/20 return. The appeal was dismissed and the surcharge upheld.
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
Where a taxpayer does not allocate payments before or at the time they are made, the creditor (HMRC) may allocate those payments to existing due debts (generally the oldest) and a VAT liability for a particular VAT period is a separate debt; failure to pay that period's liability by the statutory due date constitutes default absent a prior agreement (such as a Time-to-Pay arrangement).
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 notes that COVID-era VAT deferral measures and the VAT deferral new payment scheme may have been available to taxpayers, and observes that the First-tier Tribunal is confined to the statutory tests of late payment and reasonable excuse rather than broader proportionality or general fairness challenges to the surcharge regime.