Cotter v HMRC

In Cotter v HMRC ([2013] UKSC69 – 6 November 2013) the taxpayer had left it to HMRC to calculate the tax due in respect of the year 2007/08. His accountant had subsequently sent a ‘provisional loss relief claim’ which resulted from the implementation of a tax avoidance scheme in the tax year 2008/09 generating a loss that he claimed to set off against the 2007/08 liability. The accountant claimed that as a result no tax was payable as at 31 January 2009.

HMRC had opened an enquiry into the claim but had not given effect to any credit for the loss pending the closure of the enquiry - and had issued proceedings in the County Court for the tax owed. These proceedings were now in the Supreme Court (after the high court and the court of appeal see Cases Tax Journal dated 16th February 2012).