Spirit Motor Company Limited v The Commissioners for HMRC
Decision date: 30 June 2023
Neutral citation: [2023] UKFTT 614 (TC)
Overall AI summary confidence: medium
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: medium
This appeal concerned whether HMRC properly issued surcharge liability notices (SLNs) to Spirit Motor Company Ltd for VAT periods 08/21 and 11/21 and whether the company had an objectively reasonable excuse for late filing/payment. The tribunal found the SLNs were properly issued, the company conceded the defaults, and the evidence did not establish an objectively reasonable excuse (including reliance on a direct debit and Covid-related disruption). The appeal was dismissed and the surcharges remain payable.
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: medium
Where SLNs are properly issued and the taxpayer concedes or is shown to have filed/paid late, the burden is on the taxpayer to prove an objectively reasonable excuse under s59(7) VATA; personal hardship, business disruption or genuine mistakes do not automatically satisfy that test, and a taxpayer in similar circumstances must take reasonable steps (for example, checking that a direct debit actually cleared) to avoid default.
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 applied and endorsed an objective test for reasonable excuse drawn from prior authorities, noting and following Perrin’s three-step approach (identify asserted facts, decide which facts are proven, then assess whether those proven facts amount to an objectively reasonable excuse). It also observed that mistakes can be relevant but are not per se sufficient to establish a reasonable excuse (citing Garnmoss).
Warning
This chunk repeats material and contains some duplicated passages, which may make extraction of unique points slightly noisy. notes contain some duplicated material and may be slightly noisy.