In three cases this year, Grays Timber, Hanover and Davies the Courts and Tribunals have had to look at factual situations where HMRC has made statements which it has later gone back on. The law in this area is in a state of disarray. Stability in the tax system is not just about how often the law is changed by Parliament but also whether the interpretation of the law by the authorities changes. In BAA VAT incurred on a takeover was held to be recoverable and in Tower MCashback the issue of whether expenditure had been incurred for capital allowances was addressed. At least three of these cases are currently subject to appeals.
