Stephen John Stanley v Commissioners for Her Majesty's Revenue and Customs
Decision date: 29 December 2009
Neutral citation: [2009] UKFTT 383 (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 Mr Stanley's ticket-and-coach business fell within the Tour Operators Margin Scheme (TOMS) and whether HMRC's margin-based VAT assessments for 2005–2007 were made to best judgment. The tribunal held that the business was within TOMS but allowed the appeal because HMRC's assessments used an incorrect methodology that omitted ticket sales from the margin calculation. The assessments were set aside, and no costs were awarded.
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
The decision indicates that where TOMS applies the margin must be calculated by reference to all relevant sales and costs as required by the governing Order; an assessment will not be a valid "best judgment" assessment if HMRC applies an incorrect methodology that omits relevant components (here, ticket sales sold at cost) leading to a distorted margin.
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 noted that repeated failures by HMRC officers over the years to explain TOMS or to raise assessments were unfortunate but did not change the scheme's applicability; and that an implausibly high margin percentage (such as 62.7%) may signal a methodological error in computing the TOMS margin.