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Bartram case scuppers determination appeals

11th Jul 2012
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HMRC estimates of tax owed by someone who hasn’t filed a return has the same force as a self-assessment tax return and can’t be appealed until a return is filed, the upper tier tribunal ruled.

The case of Michael Bartram v HMRC (UKUT 184, TCC) concerned a taxpayer who had failed to file income tax returns for three consecutive years, prompting HMRC to issue determinations of his tax liability for those years.

Bartram appealed against the determinations to the first-tier tribunal. In July last year, a tribunal struck out the appeal on the grounds that no appeal could be made against an HMRC determination under section 28c of the Taxes Management Act 1970 (TMA).

HMRC argued that Bartram should have submitted a return – which would have superseded the determination – if he disagreed with it.

Bartram argued that a determination was “an assessment to tax which is not a self-assessment”, and could therefore be appealed. He argued in his appeal that the first-tier tribunal had incorrectly interpreted and applied the tax legislation - in particular, section 197 of the Finance Act 1994 (FA 1994) and the definition of Income Tax Acts, section 831(1)(b).

Bartram admitted before the upper tribunal that that his accountants, Clarke & Co, were no longer acting for him and acknowledged he did not have sufficient technical expertise to put the arguments his advisers had prepared to the court.

Nor did he have sufficient papers to instruct solicitors to appear on his behalf in place of Clarke & Co, which had retained his papers.

The only material available to assist his was a letter from the accountants dated 8 November 2011 that expanded the grounds of appeal attached to the Notice of Appeal.

The upper tribunal rejected those arguments. In a ruling that combines abstruse legal puzzle work with the tragicomedy of Bartram's circumstances and complaints against HMRC, Judge John Clark said that he was “not satisfied” that s197 FA 1994 defines a determination by HMRC as “an assessment” of tax owed. This means that the determination cannot be appealed against and will only be superseded by a self-assessment tax return.

On the definition of “tax acts”, the judge accepted HMRC’s argument that there was a difference between management of taxes, which included appeals, and “the Tax Acts”, which dealt with the charging of tax. TMA 1970 was a management act, he confirmed and on that basis it did not fall within the definitions cited in legislation for “tax acts”.

Because a determination is just a best estimate from HMRC based on limited information, Anne Fairpo said in her tax podcast this week (16 July) that the judge’s decision was not wholly surprising. A victory for the taxpayer may have given them an advantage over HMRC, so it was “probably a pragmatic response from the tribunal”,  she said.

Replies (2)

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By Tom 7000
16th Jul 2012 14:43

Puzzle no2

So lets say they make a determination for 2005/6 and 2006/7. You send in your tax returns to correct this as its lower  and they say...sorry out of time, you cant reduce the detrminations, time limits passed. BUT if the tax due is more, we will increase them....

Seems to be what we agree?

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By andrew.hyde
16th Jul 2012 15:17

Not quite...

...unless I've misunderstood your point.

The time limit for HMRC to make a determination is set by Para 36(5) Sch 18 FA 1998 at (effectively in most cases) 4 years after the end of the accounting period.

Under Para 40(3) ibidem the company has at least 12 months from the date of the determination to displace it by submitting a CT self assessment, which then 'supersedes' it. 


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