The Commissioners for HMRC v Hyrax Resourcing Limited
Decision date: 13 July 2021
Neutral citation: [2022] UKFTT 218 (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 HMRC's penalty claim under TMA s100C for Hyrax Resourcing Limited's failure to notify promoter tax‑avoidance arrangements (DOTAS) between 9 April 2014 and 5 March 2019. The First‑tier Tribunal found Hyrax did fail to notify, rejected its reliance on advice from the scheme promoter/EDF and its counsel as a reasonable excuse, held Hyrax's arrangements were not "substantially the same" as K2 so were not deemed notified, and imposed the statutory maximum penalty of £1,074,600. Hyrax was given leave to seek permission to 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: medium
The decision indicates two principal legal findings: (1) reliance on advice provided by, or obtained for the benefit of, a promoter with a clear financial interest is unlikely to afford the taxpayer a "reasonable excuse" for non‑notification where the advice was not procured for the taxpayer's independent benefit; and (2) the statutory test of whether arrangements are "substantially the same" requires assessing whether differences are immaterial to the legal analysis of tax avoidance — changes that make a previously ineffective scheme effective are material and defeat a deemed‑notification argument.
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 made non‑binding observations stressing the importance of contemporaneous documentation over late witness recollection, that parties may suffer adverse findings for withholding relevant documents, and that DOTAS aims to give HMRC early notice (with guidance expecting notification within five days of availability/implementation). These remarks inform credibility and procedural expectations but are not treated as binding ratio.