Leonard Toye v The Commissioners for HMRC
Decision date: 6 March 2025
Neutral citation: [2025] UKFTT 301 (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 a personal liability notice (PLN) issued to Mr Toye as a director of Black Wolf Ltd for alleged deliberate inaccuracies in VAT returns (02/19–11/21) mainly concerning motorbikes and double‑glazing input VAT claims. The tribunal preferred Mr Toye’s oral evidence, found those input VAT claims were not inaccurate when made, found no basis for the deliberate‑behaviour penalty tied to them, and allowed the appeal and rejected the PLN so far as it related to those claims.
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
The tribunal treated the core legal test for a "deliberate" inaccuracy as requiring HMRC to prove an intention to mislead HMRC as to the truth of the relevant statement; where a PLN is relied on but the underlying alleged over‑recovery of input tax is not established, the PLN cannot stand. The tribunal also accepted that contemporaneous oral evidence tested at hearing may be preferred over untested written allegations.
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 judgment observed that the company should have accounted for output VAT when an asset (the third motorbike) was taken into private use and that HMRC could have assessed output tax then; it also commented that uncorroborated resignation or solicitors’ letters have limited weight if not tested by cross‑examination, and that a director deferring VAT accounting contrary to accountant advice may be evidence of dishonesty even if not pursued by HMRC.