Hughes Property Partners Limited v The Commissioners for HMRC
Decision date: 25 May 2023
Neutral citation: [2023] UKFTT 453 (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 challenged Schedule 55 penalties for a late ATED relief return; the return was due 16 Sept 2020 and filed 12 May 2021. The Tribunal held the appellant’s explanations (agent unfamiliarity with ATED, Covid-19 pressures and workload) did not amount to a reasonable excuse and HMRC’s refusal to apply a special-circumstances reduction was not flawed. The appeal was dismissed and the penalties upheld.
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: high
The Tribunal treated as decisive that reliance on an adviser’s incompetence or general pandemic-related business pressures does not constitute a reasonable excuse for missing a statutory filing deadline unless the taxpayer can show they took reasonable care to avoid the failure; and that a decision by HMRC not to reduce a Schedule 55 penalty for “special circumstances” will only be displaced by the Tribunal if HMRC’s decision was flawed in the sense required by paragraph 22(3)(b) (i.e. akin to a judicial-review flaw).
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: high
The judgment includes commentary that HMRC is not required to issue a notice to a taxpayer to file an ATED return because liability arises when the taxpayer notifies HMRC, and that a nil tax liability on its own does not make Schedule 55 penalties disproportionate or automatically a factor requiring special reduction.