Mr Jeremy Riley v Commissioners for Her Majesty's Revenue and Customs
Decision date: 9 May 2011
Neutral citation: [2011] UKFTT 306 (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
Mr Riley appealed HMRC's imposition of a 5% late payment surcharge of £3,919 (and challenged an asserted second 5% surcharge of £195.95) on self-assessed tax due 31 January 2010. The tribunal found that Mr Riley had a reasonable excuse (his father's illness and death) for part of the default period but not throughout the statutory periods required to avoid surcharges. The first surcharge was confirmed and, if the second was issued, it was also properly imposed; the appeals were dismissed (with parties to verify issuance of the second notice).
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
A temporary reasonable excuse (such as bereavement) will not set aside a surcharge unless it continues throughout the entire statutory period of default; the statutory test requires the reasonable excuse to exist for the whole relevant period. Additionally, choosing to delay payment while disputing amounts or awaiting HMRC correspondence generally does not qualify as a continuing reasonable excuse.
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 indicated that reliance on an agent (PwC) who prepared/confirmed figures does not automatically relieve the taxpayer of responsibility to pay on time and any remedy for agent error is against the agent. It also suggested that non-receipt of later HMRC correspondence that arrives after the due date is unlikely to assist a reasonable-excuse defence.