Pierre Andre Divisia v The Commissioners for HMRC
Decision date: 22 June 2023
Neutral citation: [2023] UKFTT 543 (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 best-judgment VAT assessment of £7,612 for 04/18–04/20 and HMRC’s simultaneous revocation of Pierre Andre Divisia’s Flat Rate Scheme (FRS) authorisation. The Tribunal held HMRC’s assessment was properly made to the best of their judgment using material supplied by the appellant, but HMRC acted unreasonably in terminating his FRS authorisation as not shown to be “necessary for the protection of the revenue.” The assessment was remitted to apply the correct FRS rates to HMRC’s determined outputs; the appellant was granted permission to appeal out of time.
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
A best-judgment assessment is valid where HMRC have fairly and bona fide considered material before them and used a methodology reasonably based on the taxpayer’s own records; conversely, revocation of FRS authorisation under regulation 55P requires HMRC to be reasonably satisfied that termination is necessary for the protection of the revenue, with regard to its effect on the taxpayer.
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 commented that retrospective termination of FRS because it would increase revenue is not by itself sufficient to show protection of the revenue; there must be more than ordinary compliance errors to justify termination. It also noted HMRC are not obliged to perform a taxpayer’s accounting work and that taxpayers should particularise and provide alternative calculations when challenging HMRC’s use of their data.