Key Facts
- •Assembly Global Networks Ltd (AGN) submitted an amended corporation tax return claiming an R&D credit.
- •HMRC paid the credit and later opened an enquiry.
- •A letter opening the enquiry (Enquiry Letter) was sent to AGN's registered office.
- •AGN claimed non-receipt of the Enquiry Letter, arguing the enquiry was invalid.
- •The Tribunal determined as a preliminary issue whether the Enquiry Letter was served in time.
Legal Principles
Deemed service under the Interpretation Act 1978, s.7: A properly addressed, pre-paid, and posted letter is deemed served unless the contrary is proved.
Interpretation Act 1978, s. 7
Taxes Management Act 1970, s.9A sets out the time limit for issuing a notice of enquiry.
Taxes Management Act 1970, s. 9A
Taxes Management Act 1970, s.115 outlines how a notice of enquiry may be served.
Taxes Management Act 1970, s. 115
Companies Act 2006, s.1139 allows service on a company at its registered office.
Companies Act 2006, s. 1139
Standard of proof is the balance of probabilities.
Re B [2008] UKHL
In cases of automated processes, system evidence can suffice to prove posting.
Qureshi v HMRC [2018] UKFTT 0115 (TC); Barry Edwards v HMRC [2019] UKUT 0131 (TCC)
A deeming provision should not be applied to produce unjust, absurd, or anomalous results unless compelled by clear language.
Fowler v HMRC [2020] UKSC 22
The purpose of a deeming provision is to avoid item-by-item proof of service.
Fowler v HMRC [2020] UKSC 22
To prove non-receipt, the recipient must show the letter was not received at the properly addressed address.
Calladine-Smith v Saveorder Ltd [2011] EWHC 2501 (Ch); R (oao Broomfield) v HMRC [2018] EWHC 1966 (Admin)
Outcomes
Preliminary Issue decided in favour of HMRC.
The Enquiry Letter was deemed served under IA s.7 as it was properly addressed, pre-paid, and posted, and AGN failed to prove non-receipt.