Hawthorn Properties Unlimited v The Commissioners for HMRC
Decision date: 3 April 2024
Neutral citation: [2024] UKFTT 305 (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
Hawthorn Properties appealed ATED late-filing penalties imposed under Sch.55 FA 2009/2013 after the company failed to file annual returns for several years because it was genuinely unaware of the ATED filing requirement. The First-tier Tribunal found it lacked jurisdiction over the 2021/22 appeal, concluded HMRC's approach to refusing special reduction was irrational so the Tribunal could reconsider special circumstances, and on that basis discharged the 2015/16 penalties, dismissed the 2016/17 challenge, and reduced the 2018/19 and 2020/21 penalties to nil except for the initial £100 penalties for those years.
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 indicated that where a single genuine lack of knowledge of a filing obligation produces repeated annual defaults, it can be irrational to treat each subsequent default as a fresh, unrelated mistake; in such cases the Tribunal may lawfully reassess whether cumulative factors amount to "special circumstances" under para.16 of Sch.55 and reduce penalties accordingly.
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 suggested (non-bindingly) that the absence of a legislative cap comparable to para.13 does not prevent finding special circumstances, that the mere absence of tax loss or penalty size is not necessarily a special circumstance, and that the annual nature of returns does not automatically mean repeated opportunities to discover an unknown obligation.