Davies Construction v Commissioners for Her Majesty's Revenue and Customs
Decision date: 24 January 2011
Neutral citation: [2011] UKFTT 77 (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
Davies Construction (Mr Davies) failed CIS compliance by not paying a 2007/08 balancing payment, a 2008/09 payment on account and a surcharge. He relied on cashflow difficulties (slow contractor payments, limited overdraft, prioritising workers/suppliers) and argued “reasonable excuse”; the First-tier Tribunal found him honest but held there was no reasonable excuse and dismissed the appeal.
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 treated as binding for this case that ordinary business cashflow problems resulting from inadequate working capital do not, by themselves, constitute a reasonable excuse for CIS compliance failures, and that a consequence of non‑compliance (such as loss of gross status) cannot be relied on as the causal 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 decision records that the earlier authority Steptoe (1992) remains useful guidance and should not be confined to its facts, and that HMRC’s provision of assistance and advice was noted but did not amount to a reasonable excuse in the present circumstances.
Warning
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