There is a balance to be found between HMRC’s responsibility to collect tax, and the duty to treat taxpayers fairly. This case is worth looking at esp para 43:
At times, the Commissioners came close to characterising the duty to collect tax as a trump card which prevails over all other considerations (save, possibly, for those cases where extreme personal prejudice in the form of detrimental reliance can be made out). It is necessary to be clear about the nature and scope of this duty: the duty to collect tax is not a narrow duty which requires the Commissioners simply to enforce the statute, come what may. It is a broad duty, exercised by means of a wide managerial discretion, within which is embedded the obligation to treat taxpayers fairly. That means that in the pursuit of that duty, the public authority can be required to forgo tax which is due under the statute, if to do otherwise would cause such conspicuous unfairness as to constitute an abuse of the Commissioners' powers.
About Les Howard
Hi, I am a VAT Consultant, working mainly with charities. I am based in Cambridgeshire
I have over 20 years experience in VAT, and am currently also a part-time member of the Tax Tribunals.