A J Flack Limited v Commissioners for Her Majesty's Revenue and Customs
Decision date: 28 April 2011
Neutral citation: [2011] UKFTT 279 (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
A J Flack Ltd appealed HMRC penalties for late CIS monthly returns for four periods in 2010, arguing reasonable excuse, HMRC delay, and that the penalties were disproportionate. The Tribunal found no reasonable excuse—ignorance of the law and failure to seek available HMRC guidance did not suffice—and declined to apply a proportionality (Human Rights) review in the absence of exceptional circumstances. The appeal was dismissed and penalties upheld as mitigated by HMRC (total £800).
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 held that "reasonable excuse" relates to the reason for non-compliance (the failure to file) and not to the consequences of non-compliance; taxpayers bear the onus to be aware of and comply with tax obligations, and ignorance of the law or failure to use available HMRC resources does not constitute a reasonable excuse. Absent exceptional circumstances making a penalty wholly disproportionate, the Tribunal will not substitute a proportionality assessment for the statutory CIS penalty regime.
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 made observations distinguishing prior authorities (Greengate, Enersys, SKG) and noted that while fixed penalties can raise concerns in other contexts, only truly exceptional cases would justify departing from the ordinary statutory approach; it suggested some hypothetical cases might be so wholly disproportionate as to warrant different treatment.