Lucky Eyes Ltd v The Commissioner Of HMRC
Decision date: 26 September 2024
Neutral citation: [2024] UKFTT 868 (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
Lucky Eyes Ltd appealed HMRC assessments under Schedule 16 FA 2020 for alleged overclaimed CJRS payments relating to five employees. The tribunal found no evidence of legally enforceable contracts entitling any employee to an annual salary, treated all as variable‑rate for reference salary purposes, and accepted HMRC’s revised calculations. The tribunal also held that underclaims in one monthly claim period could not be set off against overclaims in other periods, dismissed the appeal, and confirmed reduced assessments of £8,284.27 and £18,010.40.
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
Absent evidence of a legally enforceable contractual entitlement to an annual salary, an employee is not a "fixed rate employee" for CJRS reference salary purposes and the variable‑rate reference salary rules apply; additionally, set‑off of underclaimed amounts is confined to the same monthly claim period and is not available across different claim periods in the circumstances of this case.
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 observed (obiter) that prohibiting cross‑period set‑off may produce unfair outcomes, and made non‑determinative observations about Treasury directions permitting limited amendment of claims, but did not treat those observations as decisive on the set‑off issue.