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<b>Tax Feature:</b> Special Commissioners ' Unreasonable behaviour by the appellant? By Nichola Ross Martin

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21st Feb 2006
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At first glance the case of Tiernan Commane v. HMRC [2006] SPC 518 seems pretty unremarkable, however, certain comments made by the Special Commissioner dealing with the case, Mr Adrian Shipwright, at the end of his judgment deserve emphasis.

This is the type of case which all too frequently comes to the Commissioners; an unrepresented taxpayer who makes unreasonable allegations and then fails to turn up for the hearing. The Revenue had not requested its costs in the case, but it is clear that the Appellant's conduct could well have led to them being awarded against him, had the request been made.

The taxpayer lodged an appeal against a s.19 TMA 1970 notice, issued during a full enquiry into his 2003 tax return.

The s.19A notice required the taxpayer to furnish the inspector with a selection of documents of the kind that one would normally be expected in the course of a full enquiry; bank statements, payslips, and details of employments etc. The enquiry had been instigated because the taxpayer had ticked a box to indicate that rental income had been received, but had failed to include any details of that income. He had also received employment income that appeared to be untaxed.

The appellant claimed that the s.19A notice was not valid, on the following grounds:

  • The enquiry was not legitimate.
  • The documents and information requested were not reasonably required to check the accuracy of the Appellant's return.
  • The relevant officer was being less than truthful and HMRC were uncooperative and evasive.

The Special Commissioner, Adrian Shipwright, had to decide if the documents and particulars specified in the notice reasonably required for the purposes of the enquiry into the Appellant's return. If the Appellant showed that it is not so then the Special Commissioner could direct that the notice be set aside.

To cut a short story short, the notice was found to valid, as was the enquiry and there was no evidence to show that the HMRC officer was acting otherwise than truthfully and correctly. The suggestions made to the contrary by the Appellant were 'unjustified and are merely a matter of exaggeration'.

The Special Commissioner was not impressed by the Appellant, who failed to attend the hearing, which led him to make the following remarks:

'HMRC chose not to seek costs in this case. Although there is only jurisdiction to award costs against a party where a party has behaved entirely unreasonably, I record for the sake or completeness that I might well have been persuaded to award costs against the Appellant notwithstanding the strict conditions in the light of the Appellant's whole approach and failure to attend.'

One wonders of HMRC will take these remarks on board too, there must be at least one similar case to this every month, and to be brutally honest, based on the case report, these types of unrepresented taxpayers just waste everyone's time. It is nevertheless a difficult matter when one party is claiming unreasonableness for the other to also make the same allegations in respect of costs.

Nichola Ross Martin

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