Mr Gary Knapper v Commissioners for Her Majesty's Revenue and Customs
Decision date: 1 June 2011
Neutral citation: [2011] UKFTT 365 (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 concerned two default surcharges under s.59 TMA for late payment of 2007/08 income tax. The appellant said unexpected termination and underpayment by a third party (Cubic Telecom) left him unable to pay despite reasonable conduct; HMRC did not attend hearings. The Tribunal found on the evidence that those third‑party events amounted to a reasonable excuse throughout the period of default and set aside both surcharges.
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
Where a taxpayer’s insufficiency of funds is caused by unexpected acts of a third party beyond the taxpayer’s control, and the taxpayer has acted reasonably in the circumstances, that insufficiency can amount to a "reasonable excuse" for late payment under s.59(9) TMA; the appellant bears the burden of proving such a reasonable excuse on the balance of probabilities.
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 that unchallenged oral evidence given in the absence of HMRC may be accepted but is for the Tribunal to evaluate and is not automatically binding; and that whether a reasonable excuse endures over an extended default period is a fact‑sensitive, finely balanced question depending on if and when the taxpayer recovers from the cause of default.