A Divorcee v Commissioners for Her Majesty's Revenue and Customs
Decision date: 30 November 2010
Neutral citation: [2010] UKFTT 612 (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 appeal challenged a 5% TMA default surcharge imposed for non-payment of a balancing tax due 31 January 2009. The First-tier Tribunal held it had no jurisdiction to review HMRC’s mitigation discretion under s.11 TMA and found the appellant did not have a "reasonable excuse" during the 28‑day default period; the appeal against the surcharge was dismissed. The tribunal concluded that the appellant’s prioritisation of legal and building costs and failure to seek borrowing were not, on balance, reasonable.
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 concluded as a matter of law that an appeal under the imposition provisions (s.7/9 TMA) does not confer jurisdiction on the First-tier Tribunal to review HMRC’s separate mitigation discretion under s.11 TMA; remedies for challenge to mitigation lie by judicial review. It also held that inability to pay is not itself a reasonable excuse, and that the reasons for inability will only amount to a reasonable excuse if, in the taxpayer’s circumstances, it was reasonable to deprive oneself of means to pay or reasonably to refrain from seeking available alternatives (such as borrowing).
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 there may be circumstances of extreme disturbance of mind or exceptional pressing need in which prioritising other payments could constitute a reasonable excuse, and noted the statutory oddity that an excuse arising after the due date may not be reachable by the tribunal’s s.9 powers but could be relevant to HMRC’s mitigation under s.11.