Five Star (Development) Homes Limited v The Commissioners for HMRC
Decision date: 21 October 2025
Neutral citation: [2025] UKFTT 1255 (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 late VAT returns and associated penalty points and fixed penalties under Schedule 24 FA 2021, where Five Star blamed a trainee and ANNA software for 17 late returns and delayed repayments. The Tribunal found HMRC’s records showed valid issue and service of notices, and that the appellant failed to prove a reasonable excuse or special circumstances on the balance of probabilities. The appeal was dismissed and the penalties 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
The Tribunal applied that the appellant bears the burden of proving a reasonable excuse or special circumstances on the balance of probabilities; reliance on another person (including an employee or software provider) will not found a reasonable excuse unless the taxpayer can show it took reasonable care to avoid the failure; and financial difficulty or lack of funds is not a reasonable excuse absent statutory exception.
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 observed that multiple consecutive failures make it inherently unlikely that a rare software malfunction was the sole cause; consumer-review material about the software provider has limited weight where the provider is not a party and overall reviews are positive; and not monitoring expected VAT repayments or payment of filing fees can indicate a lack of reasonable care.
Warning
Chunk contains repetition and formatting artefacts; some paragraphs and lines are duplicated and have typographical/formatting issues. Some notes contain repetition and formatting artefacts; the provided material may be noisy but sufficient for the summary.