Terry Harrison v Commissioners for Her Majesty's Revenue and Customs
Decision date: 9 August 2010
Neutral citation: [2010] UKFTT 369 (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
Mr Harrison appealed against a 5% initial surcharge of £6,638.96 for late payment of income tax for the year to 5 April 2008, arguing that reliance on a third‑party tax scheme and subsequent inability to pay amounted to a reasonable excuse. The Tribunal found he had signed an SA303 reducing payments on account and filed the return, so he was aware of the anticipated liability, and that his continued reliance on the failed scheme and failure to monitor or pay did not constitute a reasonable excuse. The appeal was dismissed and the surcharge upheld.
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 taxpayer cannot rely on ignorance of an outstanding liability as a reasonable excuse where they have previously acknowledged the anticipated liability (for example by signing an SA303) and filed the return; continued reliance on a third party tax scheme without ongoing monitoring does not ordinarily amount to a reasonable excuse for non‑payment.
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 commented that taking corrective steps after discovery (such as re‑mortgaging) does not excuse prior periods of default, and noted that HMRC’s reminders that the taxpayer remains responsible when reducing payments on account are relevant to assessing whether a reasonable excuse exists.