David Wake -Walker Ltd v Revenue & Customs [2013] UKFTT 717 (TC)
FTT-Tax
David Wake -Walker Ltd v Revenue & Customs
[2013] UKFTT 717 (TC) · 2013-11-28
[11]“11. It follows that we see no reason why the defendant in this case ought not to be able to rely upon the genuine belief that the document was valid as an element in her basis for contending that she had a reasonable excuse for having this document in her possession. ” In other words, once it was accepted as a fact that the appellant honestly or genuinely believed that the document was a valid document (as opposed to a false or forged document), it was then for the jury to decide whether holding that honest belief amounted to a reasonable excuse within the meaning of the relevant statute. That is precisely the same approach that we have explained above; albeit less succinctly.12. That clear statement of the law, set out in Chichester v Commissioners of Revenue and Customs [2012] UKFTT 397 , was doubted by this Tribunal in Coales v Revenue and Customs Commissioners [2012] UKFTT 477 where the Tribunal stated, at paragraph 31 of the Decision, that it could not agree with the analysis in Chichester (above) and an earlier decision of this Tribunal in Intelligent Management UK Ltd v HMRC [2011] UKFTT 704 . In Coales the Tribunal purported to go back to the relevant statute, in that case section 59C(9)(a) Taxes Management Act 1970, to reason that because the test under the Act is whether a person has a “reasonable excuse”, it necessarily follows that an honestly held belief must be reasonably held. That, in our judgement fails to recognise what it is that amounts to the relevant and applicable reasonable excuse. Indeed, it would mean that the relevant question would become : Did X reasonably honestly believe that a given fact was in existence, rather than : Did X honestly belief that fact Y existed and, if so, would his belief in that fact amount to a reasonable excuse for acting (or not acting) as he did. A person either holds a particular honest belief in a state of fact or he does not. It is not every honest belief that can found an argument that a person thus had a reasonable excuse for an identified default. The fact must be pertinent and relevant to the default that an appellant seeks to excuse. It will be a matter for each Tribunal whether belief in its existence is sufficient to found a finding that a reasonable excuse existed.13. If holding an honestly held belief in a fact sufficient to found a finding that a reasonable excuse exists, the sole enquiry is into the subjective state of mind of the person asserting that he holds that honest belief. The reason for this is that the Tribunal must not confuse what it is that amounts to the reasonable excuse. Once it is accepted or admitted that the holding of an honest belief in a relevant state of fact can, on appropriate facts, amount to a reasonable excuse, it is self evidently wrong then to go on to ask whether such an honest belief was reasonably held. If one does ask whether such an honest belief was reasonably held and, based upon objective analysis, answers that question in the negative, it is tantamount to sweeping away or, at the very least, emasculating the concept of an honest belief being capable of amounting to a reasonable excuse. It confuses the stages at which subjectivity and objectivity play their legitimate parts.14. This is made clear from considering the full judgement of the Court of Appeal (Criminal Division) in R v Unah (above).15. Going back to the statute does no more than identify that a person may be excused a particular penalty if he can establish that he has a “reasonable excuse” for his default (whatever default that might be). Once it is appreciated that it is the holding of an honest belief in a relevant state of fact that amounts to, or is capable of amounting to, a reasonable excuse within the statute, it is plainly wrong then to go on to ask whether a reasonable person would have held the honest belief which the Tribunal has just found (in this hypothetical case) that the appellant does hold. That part of the enquiry only plays a part at the stage when the Tribunal is deciding whether the person did or did not honestly believe the fact which he asserts he honestly believed.16. We should mention that in Coales the Tribunal referred to the decision of the House of Lords in RvG [2009] UKHL 13 ; [2010] 1 AC 43 (also cited and considered in Unah) . After referring to the speeches in the House of Lords at paragraphs76 - 77 and, in particular, that of Lord Rodger at paragraph 81, the Tribunal concluded that “ It is plain that the House of Lords is interpreting reasonable excuse in substantially the same manner as Judge Medd Q C in The Clean Car Company Ltd in the passage which I have cited. The excuse must be objectively reasonable and that test must be applied to the facts of the individual case .” We respectfully disagree. The House of Lords did not fall into the trap of failing to distinguish between applying objective considerations to the forensic exercise of deciding whether a person is being truthful when he says he honestly believed in a given state of fact, on the one hand and then, on the other hand, going on to ask whether if an honest belief in that state of fact did exist, whether, when viewed objectively, that would amount to a reasonable excuse sufficient to amount to a defence to the charge that had been laid.17. Accordingly, we must direct ourselves that if we accept as a matter of fact, that the appellant held an honest belief in a state of fact sufficient to amount to an excuse which, when viewed objectively, amounts to a reasonable excuse, there is no room for us to ask whether a reasonable person would or would not have held the identified honest belief. That would be an error of law.18. We accept and find as a fact that the appellant, by Mr Wake-Walker honestly believed that he had successfully sent the end of year submission to the respondent’s on 13 May 2011. That finding does not imply that he did not in fact do so.19. If we had had to make a finding relevant to what happened on that date we would not have been satisfied to the necessary standard of proof that if the respondents now claim, they failed to receive the submission, that was necessarily as a result of a failure on the part of the equipment being used by the appellant rather than the equipment being used by the respondents. In other words, the respondents have failed to discharge the onus of proving, on the balance of probabilities, that the expected filing did not take place by 19 May 2011.20. This document contains full findings of fact and reasons for the decision. Any party dissatisfied with this decision has a right to apply for permission to appeal against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009. The application must be received by this Tribunal not later than 56 days after this decision is sent to that party. The parties are referred to “Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)” which accompanies and forms part of this decision notice. GERAINT JONES Q. C. TRIBUNAL JUDGE RELEASE DATE: 28 November 2013