Connaught Contracts (Mrs S Bennett) v Commissioners for Her Majesty's Revenue and Customs
Decision date: 27 October 2010
Neutral citation: [2010] UKFTT 545 (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
This appeal concerned HMRC's withdrawal of Connaught Contracts' CIS gross payment status after automated checks recorded late tax payments in the qualifying period. The Tribunal found that the Appellant had a reasonable excuse for the late payments due to exceptional external cash‑flow difficulties during the 2008–09 financial crisis and allowed the appeal. Because it found a reasonable excuse, the Tribunal did not decide proportionality or whether HMRC has a discretion to withdraw gross status.
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 held that exceptional, external cash‑flow difficulties (here the 2008–09 financial crisis and its effects on a small partnership) can constitute a "reasonable excuse" under paragraphs 4(3) and 8(3) of Schedule 11 for late tax payments, and where such a reasonable excuse is established for the relevant failures there is no need to determine proportionality or other ancillary issues in the appeal.
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 expressed a tentative preference that the adverse consequences of withdrawal of gross payment status should not be taken into account when deciding whether there was a reasonable excuse, and commented that the proportionality issue is complex and would require fuller argument; it declined to decide on proportionality or HMRC's discretion in this case.