Analysis
On 10 December 2014, HMRC purported to close an enquiry into the appellant’s self-assessment for the year 2008/2009 by making amendments to the return so as to increase the tax due for that year to £16,518.60. The appellant appealed this decision principally on the basis that HMRC had failed properly to serve on him a request to file a self-assessment return.
HMRC had carried out a reconciliation of the appellant’s PAYE records showing a significant underpayment. HMRC sent a self-assessment return to what it thought was the appellant’s last known address. He did not in fact receive the return. HMRC purported to issue a determination of tax under s28C TMA 1970. The appellant subsequently completed a self-assessment for 2008/2009. This applied a ‘notional credit’ with the result that no tax was shown as being due.
HMRC purported to an open an enquiry into this return pursuant to s9A TMA and subsequently issued a closure notice amending the return to remove the notional credit with the result that return showed the appellant was due to pay £16,518.60.
The appellant contended that it was not open to HMRC to open an enquiry because no valid request to file a self-assessment return had been made, with a result that the closure notice was also invalid. The first issue was therefore whether the appellant was ‘required by a notice given to him… ‘to make and deliver a return for the year 2008/2009 under s8 TMA. This depended on whether a notice had been validly served in accordance with s115 TMA.
If the answer to that question was no, the question arose as to the status of the purported determination notice, enquiry and closure notice s28C TMA only applied where ‘a notice has been given to any person under s8… ‘. HMRC argued that the appellant had waived the requirement for a notice by filing a self-assessment return.
Held (allowing the appeal):
[1] The request to make and deliver a self-assessment was not served in accordance with s115 TMA. At the time of the request the address to which it was sent was no longer the appellant’s ‘usual or last known place of residence’. HMRC had received a more uptodate address on a P60 issued for the tax year to April 2012.
[2] The wording of the relevant sections provided no basis for the submission that by making an unsolicited return the taxpayer had waived the requirement for a notice under s8 TMA.
[3] The return that the appellant had made should be characterised as a notice of liability to income tax pursuant to s7 TMA rather than a self-assessment return. Had the time limit in s34 TMA not then expired it would have been open to HMRC to issue a request for a self-assessment return pursuant to s8 TMA in response to the information submitted by the appellant.
[4] Both the notice of enquiry and the closure notice issued to the appellant were invalid. Accordingly, the assessment to income tax made in respect of the 2008/2009 tax year was to be discharged.
[5] (obiter) the question arose as to what a taxpayer could do to resist a purported determination which he maintained was not validly made because was not given notice under s.8. If the taxpayer chose not to file a self-assessment return, but resisted enforcement of the determination notice, it would appear that the FTT would not have jurisdiction in respect of those enforcement proceedings which presumably would be instituted in the county court and where the taxpayer would be able to defend the proceedings on the basis that the notice was invalid.
JUDGMENT JUDGE TIMOTHY HERRINGTON: Introduction [1] The appellant, Alexander Revell, appeals against the decision taken on 10 December 2014 to close the enquiry into Mr Revell’s selfassessment for the year 2008/2009 by making amendments to the return so as to increase the tax due for that year to £16,518.60. [2] The dispute which is the subject of …Continue reading "Revell v HMRC [2016] UKFTT 97 (TC)"