Darren Wragg v The Commissioners for HMRC
Decision date: 5 November 2024
Neutral citation: [2024] UKFTT 1012 (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 a 5% late-payment penalty under Sch 56 para 3(2) for unpaid 2021–22 capital gains tax following Mr Wragg's share sale; HMRC issued the penalty because the tax was unpaid on the penalty date. The Tribunal held the penalty was correctly issued, rejected Mr Wragg’s reasonable-excuse defence (his chosen payment terms and failure to seek a Time to Pay arrangement were within his control), found no unreasonable delay mitigation, and dismissed the appeal and HMRC’s refusal of special reduction.
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 applied that insufficiency of funds resulting from a taxpayer’s voluntarily chosen transaction terms does not amount to a reasonable excuse where the taxpayer could have avoided those terms, and that merely notifying HMRC of inability to pay is insufficient—taxpayers or their advisers must seek and agree a Time to Pay arrangement to avoid penalty where appropriate.
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 (obiter) that a properly instructed professional adviser who is told to obtain a Time to Pay arrangement but fails to do so will undermine the taxpayer’s reasonable-excuse claim, and that evidence of an actual attempt to agree a payment plan (even if rejected by HMRC) might support a reasonable excuse.
Warning
Chunk contains substantial repetition of the same material. Notes include substantial repetition and appear to be drawn from a single chunk; they may not capture the full judgment text.