Terence Basye v Commissioners for Her Majesty's Revenue and Customs
Decision date: 4 November 2010
Neutral citation: [2010] UKFTT 549 (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 challenges HMRC's withdrawal of the appellant's CIS gross payment status because a self-assessment payment was recorded late. The Tribunal found the appellant failed the Schedule 11 para 4 compliance test because no reasonable excuse was proved, upheld HMRC's allocation of earlier payment to older arrears, and therefore sustained the withdrawal on the compliance ground. The separate question whether HMRC have a general discretion to cancel gross status was adjourned for further determination.
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 findings: (1) a self-assessment payment paid later than the 28-day disregard period in Regulation 32 cannot be ignored for the Schedule 11 para 4 compliance test; (2) HMRC's lawful practice of allocating payments to the oldest arrears is reasonable and does not of itself prejudice the taxpayer; and (3) a genuine mistake by a taxpayer or their agent does not automatically amount to a "reasonable excuse" under Schedule 11 para 4(4).
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 noted (obiter) that if HMRC do possess a discretion to cancel gross status, its exercise might be relevant in sympathetic circumstances (for example elderly long-standing contractors), and that HMRC's practical conception of "reasonable excuse" as an exceptional circumstance beyond the taxpayer's control may be a useful working guide rather than a definitive rule.
Warning
This chunk contains substantial repetition and some ambiguous or duplicated passages, making it difficult to isolate a few discrete passages; care was taken to summarise without adding facts. notes contain repetition and some ambiguous/duplicated passages; they may be materially incomplete.