Diamond Bodycraft Ltd v The Commissioners for HMRC

Decision date: 2 February 2023

Neutral citation: [2023] UKFTT 100 (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

Diamond Bodycraft Ltd appealed a VAT default surcharge after paying VAT two days late for period 10/21, blaming a malfunctioning online banking security fob and COVID-related business/health issues. The Tribunal found no reasonable excuse because alternative payment methods or contacting HMRC were available and a short delay was not exceptional, and it dismissed the appeal, upholding the surcharge.

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

A technical failure of an online banking security fob does not constitute a reasonable excuse for late VAT payment where the taxpayer could have used alternative payment means or contacted HMRC; the default surcharge regime is generally proportionate and will only be disproportionate in exceptional cases, with brief delays of one or two days not ordinarily qualifying as exceptional.

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 that COVID-related hardship or sympathy for ill health does not automatically amount to a reasonable excuse where returns were filed on time and payment was made once the fob arrived; taxpayers with prior notices of surcharge risk are expected to take reasonable alternative steps when unable to pay online.

Warning

The chunk contains duplicated and repetitive passages which required consolidation. Notes for this summary contained duplicated and repetitive passages which required consolidation.

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