Nikola Polakova v The Commissioners for HMRC
Decision date: 9 January 2023
Neutral citation: [2023] UKFTT 31 (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 arose after HMRC seized 29,800 cigarettes from Ms Polakova, assessed excise duty of £8,533 and imposed a Schedule 41 wrongdoing penalty of £3,285. The Tribunal admitted a late appeal, proceeded in the appellant's absence, struck out the appeal against the Assessment for lack of jurisdiction because the seizure was not challenged in the magistrates' court, and upheld the Penalty, finding deliberate conduct and that inability to pay did not reduce the statutory penalty.
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 Tribunal treated the Schedule 3 deeming as removing its jurisdiction to re-open whether seized goods were for personal use where no timely challenge was brought in the magistrates' court, so the Assessment could not be reconsidered. On the penalty, the Tribunal held that deliberate importation/possession of dutiable goods with knowledge that duty was unpaid supports imposition of the statutory Schedule 41 penalty bands, and financial inability to pay is not a valid basis to reduce or avoid the statutory penalty.
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 "telling" for mitigation involves informing HMRC of the act or failure and that lack of admission can justify withholding a reduction; it also commented on Rule 2 considerations (proportionality, participation, delay) in deciding to proceed in a party's absence, and that it would be unfair to remove an already-applied 20% telling reduction where the point had not been argued.