E & M Pankhurst t/a Mays Terracotta v Commissioners for Her Majesty's Revenue and Customs

Decision date: 8 February 2010

Neutral citation: [2010] UKFTT 59 (TC)

Overall AI summary confidence: high

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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

The tribunal dismissed E & M Pankhurst t/a Mays Terracotta’s appeal against a 10% VAT default surcharge of £1,770.56 for period 07/08, finding their payments arrived after the effective due date (including the 7‑day grace). The appellants’ explanation (misunderstanding the grace period and cheque lodgement timing) did not amount to a reasonable excuse. The tribunal noted prior defaults and that Time To Pay agreements do not prevent surcharges, and it urged HMRC (non‑bindingly) to consider instalments for payment where waiver is not possible.

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 applied that late receipt of VAT payments after the effective due date (including the statutory 7‑day extension) is not excused where the circumstances relied on do not constitute a reasonable excuse; additionally, having an existing Time To Pay arrangement does not by itself prevent the imposition of a default surcharge.

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 expressed sympathy for the appellants’ hardship and remarked that, administratively, it would be fair for HMRC to permit payment of a surcharge by instalments when waiver cannot be granted; it also observed that smaller surcharges below a practical threshold may not always be pursued. These comments were advisory and non‑binding.

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