Bakery Badjie v The Commissioners for HMRC
Decision date: 14 June 2023
Neutral citation: [2023] UKFTT 537 (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 case concerns Bakery Badjie's appeal against four Schedule 24 FA 2007 inaccuracy penalties for tax years 2016/17–2019/20 totaling £1,952.94, arising from large travel and subsistence and other expense claims in self-assessment returns. The Tribunal found Mr Badjie had not taken reasonable care, rejected his defence of reliance on an accountant and lack of receipts, treated the disclosures as prompted by HMRC, and dismissed the appeal, leaving the penalties intact.
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 controlling reasoning is that a taxpayer cannot escape Schedule 24 penalty liability simply by placing responsibility on an agent where the taxpayer knew of the claims and failed to check them; claiming expenses without supporting records and acknowledging the absence of receipts demonstrates failure to take reasonable care (carelessness); and a disclosure is treated as "prompted" where HMRC discovered the errors before the taxpayer informed them, limiting the available reduction.
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 contains non-binding remarks that if a taxpayer believes an agent has erred the proper remedy is against the agent rather than a defence to penalty liability, and that the standard of reasonable care is that of a prudent and reasonable taxpayer in the taxpayer's position, with specialist advice only amounting to a defence if properly sought and checked.