The Commissioners for HMRC v A Tax Payer
[2023] UKUT 182 (TCC)
Robin Houldsworth v The Commissioners for HMRC
13 March 2024
[2024] UKFTT 224 (TC)
First-tier Tribunal
HMRC said a person owed a lot of tax because they lived in the UK. The person disagreed, arguing that HMRC's own guidelines said they shouldn't have to pay. The court said it couldn't decide that because the tax law doesn't let them consider those guidelines in this type of case; the person should have challenged it differently in a different court.
Key Facts
- •Appeal against a Closure Notice issued by HMRC concerning UK residency and tax liability on dividends (£1,309,500) for the year ended 5 April 2005.
- •Appellant claimed non-UK residency based on a full-time employment contract in Switzerland.
- •HMRC applied to strike out the third ground of appeal, arguing lack of Tribunal jurisdiction to consider legitimate expectation based on HMRC guidance (IR20).
- •The third ground of appeal centered on alleged abuse of power due to HMRC's failure to adhere to IR20 guidance.
- •Significant factual disputes existed regarding the appellant's residency status during the relevant tax year.
Legal Principles
Tribunals have no inherent judicial review jurisdiction but a presumption exists that a taxpayer can challenge an enforcement decision on public law grounds unless the statutory scheme excludes it.
Beadle v HMRC [2020] EWCA Civ 562
The starting point is that appeal grounds concerning public law arguments should be pursued in judicial review proceedings rather than before the FTT, unless the statutory context indicates otherwise.
Caerdav Ltd v HMRC [2023] UKUT 00179 (TCC) and Hoey v HMRC [2022] EWCA Civ 656
The FTT's jurisdiction to consider legitimate expectation arguments depends on the statutory provisions under consideration. The statutory context is key.
Caerdav Ltd v HMRC [2023] UKUT 179 (TCC)
In the absence of a statutory definition of residence, taxpayers and their advisors must refer to case law and HMRC guidance.
R (Gaines-Cooper) v HMRC [2011] UK SC 47
The Tribunal's jurisdiction is determined by the statutory provisions governing the appeal; it has no inherent jurisdiction.
Alway Sheet Metal v HMRC [2017] UKFTT 198 (TC)
The “matter in question” in an appeal relating to a Closure Notice is limited to the conclusions stated and amendments made in the notice itself. Subsequent discussions may shed light on the understanding at the time of the Closure Notice, but they do not retrospectively extend the scope.
Shinelock Limited v HMRC [2023] UKUT 107 (TCC)
Outcomes
Application to strike out Ground 3 (abuse of power/legitimate expectation) granted.
The Tribunal lacked jurisdiction to consider the legitimate expectation argument under the relevant statutory scheme (TMA). The statutory scheme, particularly sections 28A, 31, and 50 TMA, does not provide for challenges based on legitimate expectation related to residency assessments. The 'matter in question' is confined to the conclusion and amendment in the Closure Notice.