Access Contracting Services Ltd v The Commissioners for HMRC
Decision date: 6 November 2023
Neutral citation: [2023] UKFTT 973 (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 whether Access Contracting Services (ACS) took reasonable care under Condition A of Regulation 9(3) of the CIS Regulations and whether any special circumstances justified reducing a Schedule 24 penalty, after ACS paid three payroll companies gross when they should have been paid net. The Tribunal found ACS did not take reasonable care, refused Regulation 9(5) relief, and rejected a special reduction of the penalty, but directed that if penalties are not suspended the maximum telling/helping/giving mitigation should apply.
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 what counts as reasonable care in a very small business is informed by both the business’s size and the scale of the payments at risk; where potential liability is significant, a small business must still implement proportional checks and balances. Reliance on a long‑standing or experienced employee, without independent controls or verification that high‑risk compliance tasks (such as CIS verification) were performed, does not satisfy the duty to take reasonable care.
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 obiter that evidence of a history of compliance and the small scale of operations may be relevant when assessing responsibility, but such factors do not eliminate the need for controls where potential liabilities are large; and that absence of internal controls is not necessarily evidence of non‑cooperation with HMRC, though it may limit what the appellant can produce in response to enquiries.