Enderbey Properties Limited v Commissioners for Her Majesty's Revenue and Customs
Decision date: 27 January 2010
Neutral citation: [2010] UKFTT 85 (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
Enderbey Properties Ltd had its CIS gross payment status withdrawn after a 12‑month compliance check found multiple late and non‑payments of PAYE within the qualifying period, exceeding the tolerances in the Regulations. The company relied on cashflow problems caused by a related company's liquidation, bank actions on a cross‑guaranteed overdraft, and bookkeeping/software issues; the Tribunal found no reasonable excuse and upheld HMRC’s decision. The Tribunal also held that prospective business consequences or proportionality are not relevant to the statutory decision. Enderbey may seek permission to appeal and may reapply once it meets the compliance test.
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 the statutory CIS compliance test and relevant permitted tolerances: only a small number of defaults within specified short delays are tolerated in the 12‑month qualifying period, and defaults outside those tolerances result in failure of the test unless the taxpayer establishes a "reasonable excuse" and remedial prompt compliance after the excuse ceased. The decision that proportionality or prospective business consequences cannot be taken into account in the statutory decision follows from applying those statutory requirements.
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 and HMRC made practical observations: HMRC noted subcontractor companies can sometimes offset CIS deductions against PAYE/NIC to assist cashflow; the Tribunal observed that greater openness with HMRC (for example, seeking time‑to‑pay arrangements) might have produced different practical outcomes, though such considerations do not alter the legal statutory test.