Marius Karpavicius & Anor v The Commissioners for HMRC
Decision date: 6 December 2024
Neutral citation: [2024] UKFTT 1097 (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 case concerns personal liability notices issued under sections 60–61 VATA to two former sole directors, following their companies' repeated failures to file VAT returns and pay VAT. The Tribunal found that deliberate, extended omissions up to 11/18 by both companies amounted to dishonest conduct "for the purpose of evading VAT" but that omissions in 02/19 and 05/19 did not; it accepted HMRC's construction of the 2008 Order saving and concluded it could reduce the portion of the company penalties recoverable from each officer. The recoverable amounts were reduced to £58,301 for Marius Karpavicius and £49,248 for the other appellant; the underlying company penalties were not altered.
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
Deliberate, extended omission to submit VAT returns (or to rectify obvious insufficiencies in assessments) may constitute conduct "for the purpose of evading VAT" and involve dishonesty under s60 VATA; and the Article 4 saving in the 2008 Order does not automatically prevent ss60–61 being applied where the dishonest conduct is a distinct omission rather than merely a failure to notify an under-assessment or an inaccuracy in a document.
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 that delay in filing returns is not necessarily dishonest — dishonesty depends on facts such as duration, amounts and surrounding circumstances — and indicated it would, in principle, exercise a discretion to reduce the portion of a company penalty recoverable from a sole director to avoid injustice where the company cannot effectively contest the penalty.