Following my first seat with the Litigation, Commercial and Personal Injury Department, I moved to the hectic Property Department in January 2019. I have found this area incredibly interesting, particularly Commercial Property, and important to my continual...
Anyone tempted to participate in a tax avoidance scheme would be wise to take note of one case in which a businessman complained in vain that he had been subject to HM Revenue and Customs (HMRC) inquiries for almost seven years, with no end in sight.
The inquiries concerned two tax returns that the man had filed in 2010. He had disclosed at the outset his involvement in a tax avoidance scheme that involved the use of an Isle of Man partnership to claim exemption from UK tax. He had produced a great deal of information at HMRC's request and, as far as he was concerned, the inquiries had gone to sleep and not been progressed at all since 2011.
The inquiries remained open, however, and the amount of tax that he would have to pay in respect of the relevant years had yet to be determined. On the basis that the delay in dealing with his case was unreasonable, he asked the First-tier Tribunal (FTT) to require HMRC to issue closure notices, bringing the inquiries to an end.
The FTT understood his frustration. In refusing his application, however, it noted that HMRC were inquiring into the tax returns of 1,700 individuals who had used the same tax avoidance scheme and that the man's case remained in the queue. HMRC were entitled to use a sampling method in dealing with the volume of tax returns involved and the inquiries had not been unreasonably protracted.