Philip Cox & Anor v The Commissioners for HMRC
Decision date: 6 June 2024
Neutral citation: [2024] UKFTT 510 (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
Philip and Debra Cox appealed Schedule 24 penalties imposed for inaccurate 2019–20 self‑assessment claims to Business Asset Disposal Relief after they each gifted B shares below the 5% threshold; the FTT found the returns were inaccurate and that the Coxes were careless in making those claims. The tribunal upheld HMRC’s penalty calculations (15% after quality of disclosure reductions), refused to overturn HMRC’s decision not to suspend the penalties, dismissed the appeals, and granted permission for late notification.
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
A taxpayer who has been advised that relief is available but then changes their personal circumstances (here by gifting shares) and does not obtain further tailored professional advice can be treated as failing to take reasonable care for the purposes of Schedule 24 penalties. HMRC may also set practical, measurable conditions when deciding whether to suspend penalties under paragraph 14, and may reasonably refuse suspension where proposed conditions would not meaningfully guard against further careless inaccuracies in a one‑off event.
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 discussion about attribution under paragraph 18(3) and authorities on when an agent’s default may be non‑attributable to a taxpayer who reasonably relied on proper professional advice. It also contains observations on the interaction between case law and HMRC guidance and the need for tribunals to balance consistency of guidance against the risk of fettering discretion.