Conor Tennyson v Commissioners for Her Majesty's Revenue and Customs
Decision date: 16 February 2011
Neutral citation: [2011] UKFTT 119 (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 2006–07 and 2007–08 self‑assessment surcharges and interest imposed on Mr Tennyson for late payment. He argued that large investments in his company Geotech caused an inability to pay and that those investments were socially/economically beneficial and thus a reasonable excuse. The Tribunal rejected his reasonable‑excuse case, found insufficiency of funds was not established as a reasonable excuse, and dismissed the appeal, confirming the surcharges and prescribed interest. The Tribunal also held it has no power to review or alter the quantum of interest or the statutory surcharge percentages, though HMRC has a statutory discretion under TMA s 59C(11) to mitigate or remit.
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 claims inability to pay as a “reasonable excuse” the correct test is whether a reasonable competent person in similar circumstances, exercising reasonable foresight and diligence, would nonetheless have defaulted; inability to pay is not a reasonable excuse in itself, and the cause of any insufficiency must be proven to found a reasonable excuse. On appeal the Tribunal’s role is limited to setting aside surcharges if a reasonable excuse is shown or confirming them; it cannot reassess or reduce the statutory surcharge percentages or prescribed interest, though HMRC may exercise statutory discretion under TMA s 59C(11).
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 commented that the primary purpose of the surcharge is deterrence rather than aligning with commercial interest rates. It also observed there is present uncertainty about the Tribunal’s wider judicial‑review powers to supervise HMRC’s exercise (or non‑exercise) of discretion under s 59C(11), but did not decide that wider supervisory point.