The recent High Court case of R (o.a.o. Realreed Ltd) v HMRC illustrates that HMRC can make valid retrospective assessments despite not having questioned the tax treatment of the relevant supplies during a prior inspection. The court held that the absence of an HMRC challenge during an inspection is not, in itself, sufficient to establish a legitimate expectation – and even if it had, the company had not relied on it to its detriment. Taxpayers wanting a greater degree of comfort in respect of their tax treatment should consider making a non-statutory clearance request. Taxpayers should also make contemporaneous notes of conversations with HMRC, as they can prove essential in a future dispute with HMRC.
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The recent High Court case of R (o.a.o. Realreed Ltd) v HMRC illustrates that HMRC can make valid retrospective assessments despite not having questioned the tax treatment of the relevant supplies during a prior inspection. The court held that the absence of an HMRC challenge during an inspection is not, in itself, sufficient to establish a legitimate expectation – and even if it had, the company had not relied on it to its detriment. Taxpayers wanting a greater degree of comfort in respect of their tax treatment should consider making a non-statutory clearance request. Taxpayers should also make contemporaneous notes of conversations with HMRC, as they can prove essential in a future dispute with HMRC.
If you are not a subscriber, subscribe now to read this content.
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