Louise Duncan v The Commissioners for HMRC
[2023] UKFTT 697 (TC)
Rajab Zafari, R (on the application of) v The Commissioners for HMRC
28 November 2024
[2024] EWHC 3014 (Admin)
High Court
Someone filed amended tax returns late. They thought HMRC's previous letter meant HMRC would accept them. The court said the letter wasn't clear enough to promise that. Importantly, the court also decided that HMRC *can* accept late returns, but it's up to their discretion whether they do.
Key Facts
- •Taxpayer (Claimant) discovered overstated income in tax returns for 2014, 2015, 2017, and 2018.
- •Amended returns submitted in January 2023, outside the 12-month amendment period (Taxes Management Act 1970, s. 9ZA).
- •HMRC (Defendants) refused to accept the amended returns.
- •Claimant argued a legitimate expectation arose from HMRC's letter of September 30, 2022.
- •HMRC initially suggested discretion to accept late returns but later argued they lacked the power.
Legal Principles
A legitimate expectation can arise from a public body's actions or statements, preventing unfair frustration of that expectation.
R v Secretary of State for Education ex p Begbie [2000] 1WLR 1115; Re Finucane’s Application for Judicial Review [2019] UKSC 7
No legitimate expectation arises if the public body lacks the legal power to act.
Begbie; MFK Underwriting Agencies Ltd [1990] 1 WLR 1545
A representation must be 'clear, unambiguous and devoid of relevant qualification' to create a legitimate expectation.
MFK; R(Bancoult) v Foreign Secretary (No 2) [2009] 1 AC 453
The representative must have actual or ostensible authority to make the representation creating the legitimate expectation.
South Bucks DC v Flanagan [2002] EWCA Civ 690
The court considers fairness in determining whether a legitimate expectation exists and the factual context is crucial.
Re Finucane’s Application; MFK
Statutory time limits are important for fiscal finality and control over public finances.
None explicitly cited, but implied throughout the judgment.
HMRC's power to accept late tax returns derives from section 5(1)(a) of the Commissioners for Revenue and Customs Act 2005 and its predecessor, section 1 of the Taxes Management Act 1970.
Commissioners for Revenue and Customs Act 2005, s. 5(1)(a); Taxes Management Act 1970, s. 1
Outcomes
Claim dismissed.
HMRC's September 30, 2022, letter did not create a clear and unambiguous legitimate expectation that amended returns would be accepted. Even if it had, HMRC possesses the power under section 5 of the 2005 Act to accept late returns, albeit within its discretion.