Michael Barrett v The Commissioners for HMRC
Decision date: 23 October 2023
Neutral citation: [2023] UKFTT 902 (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
Mr Barrett appealed a Schedule 41 penalty of £182.40 for failure to notify liability to the High Income Child Benefit Charge for 2018/19. The Tribunal found HMRC had validly issued the penalty but, on the balance of probabilities, accepted Mr Barrett did not receive two HMRC "Nudge Letters" sent to an address he no longer occupied and that, objectively assessed in his circumstances, this amounted to a reasonable excuse. The penalty was cancelled and the appeal allowed.
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 receipt of correspondence sent to an address held by HMRC as a question of fact to be resolved on the balance of probabilities and held that non-receipt can constitute a reasonable excuse for failure to notify HICBC liability where, viewed objectively in the taxpayer's circumstances (including prior non‑self-assessment status and no prior notice to file), the taxpayer did not receive the relevant HMRC communications.
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 suggests it is not objectively unreasonable for a PAYE taxpayer, who has not been required to file returns, to assume they need not continuously update HMRC with address changes; and that ignorance of a legal requirement may, in appropriate circumstances, amount to a reasonable excuse depending on the taxpayer's attributes and situation.