Matthew Kensall v The Commissioners for HMRC
Decision date: 21 December 2022
Neutral citation: [2023] UKFTT 11 (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 discovery assessments of £2,295 and Schedule 41 penalties of £459 issued by HMRC to Mr Kensall. The Tribunal found HMRC had misdirected him and that he had a reasonable excuse for failing to notify, so the penalty appeal was allowed and the penalties cancelled. However, because Mr Kensall had not appealed the discovery assessments to HMRC before the statutory cutoff, the Finance Act 2022 retrospective protection applied and the Tribunal refused the appeal against the assessments. The Tribunal invited HMRC to consider care and management relief.
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 retrospective statutory protection for discovery assessments applies (because the taxpayer did not appeal the assessments to HMRC before the statutory cutoff), the Tribunal cannot give effect to subsequent case law to invalidate those assessments even if the taxpayer was misdirected by HMRC; misdirection can, however, support a factual finding of a reasonable excuse for failure to notify and justify cancellation of penalties.
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 indicated it is in the interests of justice to allow late amendments where the parties and Tribunal have proceeded on the basis an appeal was validly before the Tribunal. It also noted that HMRC’s care and management powers (and internal guidance) may be appropriate to address unfairness arising from HMRC misdirection where the Tribunal lacks power to grant relief.