S Morris Groundwork Limited v Commissioners for Her Majesty's Revenue and Customs
Decision date: 18 November 2010
Neutral citation: [2010] UKFTT 585 (TC)
Overall AI summary confidence: medium
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: medium
This appeal concerned whether S Morris Groundwork Ltd satisfied the statutory compliance test for gross payment status under the Construction Industry Scheme after late PAYE, late contractor returns and a late corporation tax payment. The Tribunal found the late CT payment alone did not automatically constitute a reasonable excuse, but having regard to the company's explanation and the disproportionate consequences of losing gross status (risk to a major contract and many jobs) the company nevertheless had a reasonable excuse and the appeal was allowed.
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: medium
From the Tribunal's reasoning it can be taken that the likely severe consequences of withdrawal of gross payment status are a relevant factor in assessing whether there is a "reasonable excuse"; however, delay in paying corporation tax caused by previous accountants' late or incomplete accounts will not automatically amount to a reasonable excuse.
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 a preference for the approach in Bruns (which allows consequences to be relevant) over Grosvenor (which treated consequences as irrelevant), indicating that in some cases the disproportionate economic impact of withdrawal can outweigh the late payment itself; this appears to be obiter support for weighing consequences in reasonable excuse assessments.
Warning
This chunk contains repeated and lightly garbled passages from the decision text; care was taken to avoid reproducing formatting artifacts. The supplied notes contain repeated and lightly garbled passages and may be materially incomplete; they were the sole source for this summary.