Neoterick Uk Limited v The Commissioners for HMRC
Decision date: 22 September 2022
Neutral citation: [2022] UKFTT 442 (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
Neoterick UK Ltd appealed an HMRC VAT assessment under VATA s.73(1) for 01/14–07/17, contesting whether HMRC had made the assessment "to the best of [its] judgment". HMRC relied on two test purchases and two invigilations showing an average of 92% standard-rated sales and extrapolated that percentage across turnover; the Tribunal found HMRC acted honestly, had sufficient material for a judgment, and that the assessment fell within a reasonable range. The appeal was dismissed and the assessment upheld.
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
An s.73(1) assessment is valid where HMRC has some material enabling a bona fide value judgment and the assessment is not arbitrary, capricious or wholly unreasonable; HMRC need not conduct exhaustive investigations or perform the taxpayer’s evidential work if reasonably conducted sampling and invigilation provide sufficient material to support extrapolation.
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 tentative or cautious wording in HMRC correspondence (e.g. "believe", "possible") does not, by itself, show the absence of a bona fide judgment, and that short sampling periods need not be strictly proportionate to a long assessment period where extending them would be excessive and unnecessary to assemble adequate material.
Warning
Chunk contains duplicated and repetitive material and formatting noise. Notes contain duplicated and repetitive material and formatting noise; they may not capture the full judgment.