Sharon Suttle v The Commissioners for HMRC
Decision date: 26 September 2023
Neutral citation: [2023] UKFTT 873 (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 concerned personal liability notices (PLNs) issued to the directors of Earn Extra 139 Ltd after HMRC issued large Regulation 80/Section 8 assessments and an 85% Schedule 24 penalty against the company for PAYE/expenses inaccuracies. The Tribunal found the company's returns did contain inaccuracies that understated tax, but HMRC failed to prove those inaccuracies were deliberate (or deliberate and concealed) and attributable to the directors. Accordingly the paragraph 19 condition for a director‑attributable deliberate inaccuracy was not met and the appeals were allowed.
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 judgment, HMRC must prove on the balance of probabilities both (a) that the listed PAYE documents were inaccurate in ways that resulted in an understatement of tax and (b) that the taxpayer (or officer) had the necessary state of mind — either actual knowledge of the inaccuracy or a sufficiently grounded suspicion coupled with a deliberate decision to avoid confirming the true position. Submission of inaccurate returns alone does not amount to concealment without positive steps taken to hide the inaccuracy.
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 recorded procedural points: HMRC may not be permitted to change its burden/strategy late in proceedings if that change prejudices the respondents, and opinion/hearsay evidence (for example from the investigating officer or administrators) can be admissible but may attract little or no weight if untested by cross‑examination; documentary evidence should be scrutinised and preferred where conflicts exist.