1st Glass & Morror Company Limited v Commissioners for Her Majesty's Revenue and Customs
Decision date: 29 October 2010
Neutral citation: [2011] UKFTT 30 (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 challenged a 10% default surcharge (£576.81) for late VAT payment of £5,768.15 (fourth default). The Tribunal found the appellant produced no corroborating evidence of BACS/technical problems or cashflow difficulties and therefore did not have a "reasonable excuse" under s.59(7) VATA. The Tribunal also rejected a proportionality challenge to the statutory 10% surcharge and dismissed the appeal, while extending time to apply for permission to appeal pending a relevant Upper Tribunal decision.
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 relies on underlying causes (e.g. technical payment failures or insufficient funds) to establish a "reasonable excuse" under s.59(7) VATA, those causes must be supported by sufficient evidence; absent such corroboration, a reasonable excuse is not made out. A statutory default surcharge of 10% for a fourth default may be proportionate in light of its purpose to secure timely payment and the statutory design (no surcharge for a first default and de minimis safeguards).
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 noted that underlying causes of insufficient funds or payment difficulties can, in principle, constitute a reasonable excuse if adequately evidenced. It also observed that tribunals may take into account contemporaneous or subsequent Upper Tribunal authority on proportionality and may extend deadlines for leave to appeal rather than adjourning substantive determination.