MTS Recovery & Repairs Limited v Commissioners for Her Majesty's Revenue and Customs
Decision date: 27 April 2011
Neutral citation: [2011] UKFTT 274 (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 challenged a 15% default surcharge (£5,018.23) for late VAT payment for period 11/10; the return was filed on time but electronic payment was received 10–11 days late. The Tribunal found the appellants had no "reasonable excuse" for late payment, holding that insufficiency of funds is excluded by section 71(1)(a) VATA 1994, and dismissed the appeal, upholding the surcharge.
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
From the judgment as recorded in the notes, the decisive legal point is that lack of funds does not constitute a "reasonable excuse" to avoid liability for a default surcharge under section 59 when section 71(1)(a) applies; prior notices and the taxpayer’s knowledge of the surcharge regime are relevant when assessing claims of reasonable excuse.
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 observed (not as binding ratio) that Time to Pay arrangements can affect liability for particular periods and that HMRC practice does not permit continuous Time to Pay arrangements to avoid surcharges; it also noted that HMRC may treat postal dispatch of notices not returned as evidence that the taxpayer received them.