John Scofield v Commissioners for Her Majesty's Revenue and Customs
Decision date: 24 March 2011
Neutral citation: [2011] UKFTT 199 (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 case concerned whether s.66(1) Finance Act 2004, which states that "The Board may at any time make a determination cancelling a person's registration for gross payment", confers a discretion on HMRC and whether HMRC exercised any discretion when cancelling Mr Scofield's CIS gross payment registration. The Tribunal held that "may" is permissive and, in context, does confer a discretion, and that HMRC failed to exercise that discretion in Mr Scofield's case, rendering the determination of 29 January 2010 invalid. The appeal was allowed and the determination quashed.
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 operative ratio is that where a statutory provision uses "may" and the statute elsewhere contrasts "may" with "must", the natural meaning is permissive and confers a discretion on the decision-maker; a purported determination under such a provision is invalid if the decision-maker fails to exercise that discretion.
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 records that Hansard and Explanatory Notes indicate Parliament envisaged an element of operational discretion to balance deterrence with recognition of genuine error. It also observes that HMRC may not lawfully fetter a statutory discretion by rigid computer programming or blanket practices, and that policies are permissible only if individual circumstances can still be considered. These points were treated as explanatory rather than necessary to the decision.