In the past few weeks, the Courts have provided a fillip of good news for taxpayers who have claimed deductions and feel frustrated with their engagement with HMRC.
Many taxpayers in matters that HMRC treats as suspected avoidance find HMRC carrying out a very slow process with regards to the enquiry and dispute negotiation, that feels at odds with HMRCs public message to crack down on avoidance. Enquiries that Taxxa LLP have assisted their clients with can last up to ten years in some such matters. A solution can be to request a Closure Notice into the enquiry at the First Tier Tribunal, a task that Mr Märtin requested at the Tribunal, into his participation in an Icebreaker LLP. In that case, HMRC was ordered to bring Mr Märtin’s equiry to a close within 30 days as they had many years to enquire and had failed to do so properly. This reinforces our advice, that you can always bring an enquiry to a close with HMRC but you have to prepared for a hearing at the Tax Tribunal court service if you wish to.
The more interesting matter to many taxpayers was a recent case in the Court of Appeal with Derry v HMRC. This applied to the claim of Mr Derry to an income tax loss being carried back under the relevant legislation, and the method that HMRC carried out the enquiry. The Court of Appeal found in favour of Mr Derry, that HMRC had not followed the correct technical process into his enquiry of the loss relief. This is particularly interesting to individuals where they have a share or trading loss that was carried back, and could apply to the taxpayer and thereby remove the enquiry and resolve the tax dispute.
Over the next few weeks we will be speaking to all our clients with relevant situations to the two cases stated, and liaising with HMRC to apply these judgments where applicable. If you have carry back losses or a long running enquiry and would like to discuss these new developments, our team is available to assist other taxpayers as well.
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