White Breeze Limited v The Commissioners for HMRC
Decision date: 13 October 2023
Neutral citation: [2023] UKFTT 862 (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
White Breeze Ltd appealed penalties for late corporation tax returns for years to 31 July 2013, 2014 and 2015. The Tribunal found the penalties were lawfully imposed (with one 2014 penalty reduced because it had been charged at the wrong higher rate) and dismissed the appeals, concluding that White Breeze did not establish an objectively reasonable excuse for prolonged non-submission and in any event did not remedy any excuse without unreasonable delay. Final penalty amounts were £200 (2013), £200 (2014) and £1,000 (2015).
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 applied the statutory penalty regime (Sch 18 Finance Act 1998) requiring higher flat-rate penalties where returns are filed more than three months late (para 17(3)), and applied the Perrin four-stage test for “reasonable excuse”: (1) identify the facts relied on, (2) prove those facts, (3) show that those facts made the taxpayer’s conduct objectively reasonable, and (4) show that the period of default was remedied without unreasonable delay once the excuse ceased. The taxpayer failed to satisfy these requirements on the evidence.
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 oral evidence of a director’s incapacity (dementia) can be accepted in the absence of contemporaneous medical records, but that lack of documentary evidence about the impact of any incapacity and absence of internal records weakens such a case; it also observed that ongoing business activity and filing of Companies House accounts may indicate the availability of records and resources to comply with corporation tax filing obligations.