E S G Security Ltd v Commissioners for Her Majesty's Revenue and Customs

Decision date: 20 May 2011

Neutral citation: [2011] UKFTT 336 (TC)

Overall AI summary confidence: high

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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

E S G Security Ltd appealed a £2,519.06 PAYE surcharge imposed after at least three Default Notices for four late payments in 2007–08 and 2008–09. The Tribunal held that on an appeal under Regulation 204(5) the appellant may only challenge the number of defaults or the surcharge amount, not rely on a "reasonable excuse" which must be raised against individual Default Notices. The Tribunal found four Default Notices remained unwithdrawn, the statutory conditions for the surcharge were met, and confirmed the surcharge, dismissing the appeal.

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’s ratio is that an appeal against a Surcharge Notice under Regulation 204(5) is confined to contesting the stated number of defaults or the correctness of the surcharge amount; arguable "reasonable excuse" for late payment is not a permissible ground on such an appeal, and where three or more Default Notices stand unappealed within the surcharge period the Commissioners are obliged by the Regulations to issue the surcharge.

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 commented (obiter) that the PAYE surcharge scheme is a strict mechanism intended to encourage timely payment and that short delays (including those falling after weekends) or contacting HMRC’s Business Payment Support Line without entering a time-to-pay arrangement do not in themselves show disproportionate penalty or absolve the employer from responsibility to ensure cleared funds by the due date.

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