Chee Whye Yip v The Commissioners for HMRC
Decision date: 23 May 2024
Neutral citation: [2024] UKFTT 434 (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 a discovery assessment and a deliberate inaccuracy penalty relating to a £250,000 payment in 2012–13 which the appellant did not disclose. The Tribunal found on the balance of probabilities that the payment was taxable income (so the return was insufficient) but that HMRC had not proved the insufficiency was brought about deliberately by the appellant or by anyone acting on his behalf. The discovery assessment relying on the 20‑year time limit and the deliberate inaccuracy penalty were therefore discharged and the appeal 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: high
The Tribunal applied the standard that, to rely on the extended 20‑year time limit for a discovery assessment and to impose a deliberate inaccuracy penalty, HMRC must prove on the balance of probabilities that the taxpayer knew of the error and acted deliberately (intending to mislead). While HMRC proved the return was insufficient, they failed to prove the taxpayer’s deliberate state of mind, so the extended time limit and deliberate penalty could not lawfully be applied.
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 a one‑off lump sum for long‑standing services is unusual but not determinative of deliberate tax avoidance, and that absence of a written agreement can make it less likely the recipient appreciated the tax consequences. It also noted HMRC’s internal approaches to penalty reduction and practical considerations (such as the appellant’s age/health and witness availability) that can justify proceeding in the appellant’s absence; these comments did not form the legal basis of the decision.