Castledale Building Services v Commissioners for Her Majesty's Revenue and Customs
Decision date: 9 May 2011
Neutral citation: [2011] UKFTT 301 (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 243 penalties totalling £36,100 imposed on a CIS contractor for 31 late monthly returns between May 2007 and September 2009. The appellant relied on marital breakdown, loss/corruption of records, family illness, personal stress and financial difficulty as reasonable excuses; HMRC relied on publicity and that the appellant continued trading without promptly contacting HMRC. The Tribunal found the appellant failed to establish a reasonable excuse and that the penalties were not grossly disproportionate, and dismissed the appeal.
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 loss or corruption of business records as capable of constituting a reasonable excuse only if the taxpayer provides adequate particulars and evidence of what was lost, efforts to recover the information and the timing of those events. It also indicated that a taxpayer who continues trading, receives payments, but does not promptly seek alternative arrangements or inform HMRC is less likely to have a reasonable excuse for late filing.
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 commented that shortage of funds alone is not a reasonable excuse, though the underlying cause of a shortage might be relevant if evidenced and shown to have caused non-compliance; and that significant delay (about 15 months in this case) in informing HMRC of difficulties undermines a claim of reasonable excuse because a reasonable businessperson should contact HMRC or obtain assistance promptly.