In The Queen (on the application of James Ironmonger Derry) v HMRC [2015] UKUT 416 (28 July 2015), the UT rejected an application for judicial review of a demand for payment of tax.
This was an application for judicial review of a demand for tax. HMRC contended that Mr Derry had not been entitled to claim relief in relation to a loss made on the disposal of shares. He argued that a payment of £70,497 by HMRC had given effect to his claim.
The UT found that Mr Derry’s claim (made in his self-assessment return for 2009/10) did not displace the assessment to tax in the sum of £95,546 for that year. Furthermore, the claim fell within TMA 1970 Sch 1A, so that HMRC had been entitled to open an enquiry.
Furthermore, once it was accepted that HMRC was entitled to open an enquiry, Mr Derry’s argument that HMRC had given effect to his claim, by making a payment to him, could not carry any weight. The reason for HMRC’s payment was, however, unclear.
The UT therefore found that the amount of £95,546 remained due by Mr Derry, subject to any potential argument on the payment by HMRC. The parties should therefore draft an order giving effect to its decision.
Why it matters: The UT pointed out that the service of a demand did not create a liability in the absence of tax due. Mr Derry should therefore have waited to be sued in the County Court or the High Court. He could also have sought declaratory relief in advance of being sued.
In The Queen (on the application of James Ironmonger Derry) v HMRC [2015] UKUT 416 (28 July 2015), the UT rejected an application for judicial review of a demand for payment of tax.
This was an application for judicial review of a demand for tax. HMRC contended that Mr Derry had not been entitled to claim relief in relation to a loss made on the disposal of shares. He argued that a payment of £70,497 by HMRC had given effect to his claim.
The UT found that Mr Derry’s claim (made in his self-assessment return for 2009/10) did not displace the assessment to tax in the sum of £95,546 for that year. Furthermore, the claim fell within TMA 1970 Sch 1A, so that HMRC had been entitled to open an enquiry.
Furthermore, once it was accepted that HMRC was entitled to open an enquiry, Mr Derry’s argument that HMRC had given effect to his claim, by making a payment to him, could not carry any weight. The reason for HMRC’s payment was, however, unclear.
The UT therefore found that the amount of £95,546 remained due by Mr Derry, subject to any potential argument on the payment by HMRC. The parties should therefore draft an order giving effect to its decision.
Why it matters: The UT pointed out that the service of a demand did not create a liability in the absence of tax due. Mr Derry should therefore have waited to be sued in the County Court or the High Court. He could also have sought declaratory relief in advance of being sued.
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