Crane Limited v Commissioners for Her Majesty's Revenue and Customs
Decision date: 12 August 2010
Neutral citation: [2010] UKFTT 378 (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
Crane Ltd was charged a statutory default surcharge (2%) after paying a VAT instalment one day late; it admitted the late payment but argued a reasonable excuse and that the surcharge was disproportionate. The tribunal held that forgetting to instruct payment (an administrative oversight) and reliance on another’s dilatoriness do not constitute a reasonable excuse under s.71 VATA, and that it had no power to reduce the statutory rate; the 2% surcharge was not disproportionate. The appeal was dismissed and the ~£5,000 surcharge upheld, with permission-to-appeal time extended pending a related Upper Tribunal decision.
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's ratio is that an administrative oversight or forgetting to arrange payment does not amount to a reasonable excuse for a VAT default where the statutory scheme (s.71 VATA) excludes reliance on another person’s dilatoriness, and that the tribunal cannot alter a statutorily fixed surcharge rate; proportionality challenges will not succeed absent a showing that the surcharge is wholly outside what is necessary to achieve the statutory purpose.
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 the surcharge regime is aimed at encouraging timely VAT submission and payment rather than compensating the Exchequer for lost interest, and that tribunals may stay or extend appeal timelines when an Upper Tribunal decision in a related case may affect the outcome.