Share this content
Business premises

Judicial review denies CIOT member’s challenge


The promoter of a failed SDLT scheme tried unsuccessfully to challenge the CIOT handling of disciplinary procedures after he was found not to have given clients proper risk advice. The Court found that judicial review is not application to the CIOT.

15th Jun 2021
Share this content


Chartered Institute of Taxation (CIOT) member David Hannah was the principal consultant of Cornerstone Tax Advisers (Cornerstone) – a boutique operation offering stamp duty land tax (SDLT) avoidance schemes to property purchasers, usually on introduction from non-specialist firms.

In 2007, Cornerstone engaged directly with a client who was acquiring business premises on which SDLT would have been chargeable at 4%. Hannah offered Cornerstone’s service in contriving an arrangement that would interpose an intermediate entity between the seller and the ultimate acquirer of the property in order to take advantage of a relief for sub-sales available at the time. HMRC was already aware of abuses of sub-sale relief including this scheme, known as ULRICA.

At the time Hannah was touting ULRICA, counteractive legislation had already been introduced which HMRC believed made ULRICA ineffective. As is so often, counsel could be found that disagreed with HMRC’s view, or at least would offer arguments against the anti-avoidance legislation applying to the scheme.

Cornerstone consulted with counsel in framing its scheme and obtained detailed guidance about the scheme itself and how it might be presented to clients and HMRC. Advise was also sought around the precautions that Cornerstone should take in giving clients appropriate warnings about the risks of HMRC challenge and consequent failure of the scheme.

Register for free to continue reading

It’s 100% free and provides unlimited access to the latest accounting news, advice and insight every day. As well as access to this exclusive article, you can:

View all AccountingWEB content
Comment on articles
Watch our digital shows and more

Access content now

Already have an account?

Replies (12)

Please login or register to join the discussion.

By Paul Crowley
15th Jun 2021 13:45

Costs and compensation look like a bargain compared with other matters that we read.

Thanks (6)
By Justin Bryant
15th Jun 2021 15:13

I don't think this has been reported properly, as this JR case had nowt to do with the previous TDB matter.

I wonder who the Counsel is in para 100. Does anyone know?

Thanks (0)
By Donald MacKenzie
16th Jun 2021 10:25

The accounting profession should show strong disapproval of the contrived schemes such people push. When it is not clear why a step exists, other than to avoid tax, it should not be assumed acceptable.
Government needs to simplify tax and reduce scope for abuse
Will the next scandal be dodgy claims for R&D Enhanced capital expenditure allowances? I have had clients such as a builder offered R&D credit claim services. The providers of the services say claims would go through unchallenged. There appears to be no real R&D being done.

Thanks (3)
Replying to Donald MacKenzie:
By Paul Crowley
16th Jun 2021 12:42

The problem is PII
Insurance exists
If a tax payer thinks that there is a legitimate tax saving opportunity that was not mentioned, said tax payer will be compensated by PII even if it was a bit grey.

Thanks (0)
Replying to Paul Crowley:
By Justin Bryant
16th Jun 2021 12:55

You've got that the wrong way round I think. Tax advisers tend to get sued for their clients overpaying, not underpaying tax. Mehjoo v Harben Barker is a good example. As far as I know there were accordingly no PII issues in the above TDB case.

Thanks (0)
By mydoghasfleas
16th Jun 2021 13:19

TDB or TBD no both

Thanks (0)
By crozierg
16th Jun 2021 14:19

Just to be clear, the TDB disciplinary proceedings on the ULRICA scheme (which concluded in March 2020) and the judicial review judgment (handed down in April 2021) are unrelated.

CIOT commented on the JR judgment at

George Crozier (CIOT)

Thanks (2)
Replying to crozierg:
By Justin Bryant
16th Jun 2021 14:56

Yes; that's exactly what I said above. This is very sloppy journalism.

Thanks (0)
By tayloralastair
16th Jun 2021 17:00

I thought the name was familiar. It seems Mr Hannah has a habit of losing tax cases:

One has to question whether such blatantly contrived and ill founded schemes peddled by questionable outfits and practitioners should actually be pursued as evasion through criminal code. I've reviewed less reprehensible cases than this which have been prosecuted as such.
Purveyors of tax artifice who seek to hide behind an irresponsible, dubious and untested QCs opinion would soon be scuttling back under their rocks.

Thanks (0)
Replying to tayloralastair:
By Paul Crowley
16th Jun 2021 20:29

I agree
The problem is not '[email protected] selling dodgy schemes
It is rent a quote QCs
For QCs the risk is trivial compared to the price of knowingly dubious opinions

Thanks (1)
By Ian McTernan CTA
17th Jun 2021 12:17

Presumably this 'adviser' did dozens if not hundreds of these schemes, charging many thousands at a time.

Fines of £5,000 and £5,000 costs is laughable.

Meanwhile some struggling sole practitioner does something wrong and gets double that fine and £15,000 costs.

It's not exactly going to discourage promoters of dodgy schemes, is it?

One day HMRC will realise they should employ some of us people out in the real world to help design a tax system fit for purpose and to catch all the dodgy schemes touted around.

Thanks (0)
Replying to Ian McTernan CTA:
By Justin Bryant
17th Jun 2021 12:36

To be fair, the TDB case involved the same SDLT scheme as in the link below, where you will note s75A failed to bite for procedural reasons and the taxpayer only lost due to the usual thing where judges stretch the meaning of legislation (with little if any justification) against tax avoiders to help HMRC:

Thanks (1)