Pertemps Limited v The Commissioners for HMRC
Decision date: 27 August 2026
Neutral citation: [2026] UKFTT 1253 (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
Pertemps appealed two late-VAT penalties after failing to pay a balancing VAT payment due 30 November 2024; the Tribunal found no reasonable excuse and upheld penalties of £115,741.02 and £830.03. HMRC had not shown it had considered “special circumstances” under paragraph 13 Schedule 26 FA 2021, giving the Tribunal jurisdiction to consider reduction, but the Tribunal declined to reduce the penalties on its own assessment. The Tribunal attributed the failure to insufficient funds arising from Pertemps’ commercial choices and omissions in managing working capital.
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 core holding is that insufficiency of funds does not constitute a reasonable excuse unless caused by events outside the taxpayer’s control; cash‑flow shortfalls resulting from the taxpayer’s commercial decisions and lack of timely steps to manage risk (such as arranging finance or engaging earlier with banks/HMRC) will not justify relief. Additionally, if HMRC has not demonstrated consideration of paragraph 13 (special circumstances), the Tribunal may consider reduction itself but will only reduce penalties where circumstances are sufficiently out of the ordinary.
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 contains observations that a responsible, substantial business that enters materially expanded contracts before a known seasonal peak is expected to anticipate and arrange for increased working capital (including earlier engagement with banks and HMRC), and that commercial choices to prioritise payments (e.g. payroll to avoid reputational harm) do not, without more, displace statutory obligations to pay tax or amount to a reasonable excuse.