CF Booth Limited v The Commissioners for HMRC
Decision date: 19 December 2023
Neutral citation: [2024] UKFTT 347 (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
CF Booth Ltd appealed Schedule 24 FA 2007 penalties totalling £1,444,813.71 assessed by HMRC for deliberate (but not concealed) inaccuracies in VAT returns, largely arising from Kittel-style input tax disallowances and some zero-rating errors. The Tribunal found CFB’s disclosure was only middling — cooperative but passive and not proactively admitting knowledge of fraud — and upheld HMRC’s applied penalty percentages and special-reduction decision. The Tribunal also found the penalties were not disproportionate on the facts 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’s ratio is that a taxpayer’s passive cooperation during HMRC verification, without proactively disclosing knowledge that transactions were connected to fraud, amounts to only middling quality of disclosure under paragraph 10 and does not justify further reduction of penalties; additionally, an HMRC failure to carry out an indicated further internal review does not automatically render the final decision unlawful or require substitution where the decision addressed representations and no different outcome was likely; application of Schedule 24 to inaccuracies arising from Kittel-style disallowance is not, by itself, disproportionate.
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 indicated obiter that the existence of s69C (a fixed 30% penalty regime) does not by itself create “special circumstances” justifying reductions under Schedule 24, and that CJEU authorities dealing with different factual schemes (for example fictitious circular transactions) do not automatically show Schedule 24 penalties are disproportionate in Kittel-style cases.