Bartram v Revenue and Customs Commissioners
| Jurisdiction | UK Non-devolved |
| Judgment Date | 30 May 2012 |
| Neutral Citation | [2012] UKUT 184 (TCC) |
| Date | 30 May 2012 |
| Court | Upper Tribunal (Tax and Chancery Chamber) |
[2012] UKUT 184 (TCC).
Upper Tribunal (Tax and Chancery Chamber).
Judge John Clark.
The appellant appeared in person.
Michelle Turkie, Legal Officer, HM Revenue and Customs, for the respondents.
Income tax - Determinations of tax where no return delivered - Rights of appeal - Whether right of appeal to First-tier Tribunal against such determinations - Appeal struck out by First-tier Tribunal on ground that no such right of appeal - Whether strike-out decision correct - Taxes Management Act 1970, Taxes Management Act 1970 section 28Cs. 28C - Finance Act 1994, Finance Act 1994 section 197s. 197.
This was an appeal by the taxpayer against a decision of the First-tier Tribunal to strike out his notice of appeal against determinations made by HMRC under TMA 1970, s. 28C where he had not made a self-assessment return.
In the absence of any self-assessment return being submitted, HMRC made determinations under TMA 1970, s. 28C against the taxpayer for the years to 5 April 2006, 2007 and 2008. The taxpayer sought to appeal against those determinations but the FTT, without making any findings of fact, decided that it had no jurisdiction to consider an appeal against a s. 28C determination and struck out the notice of appeal ([2011] UKFTT 471 (TC); [2011] TC 01321). The FTT indicated that, if a taxpayer thought that a determination was wrong, he could put in a tax return, or could argue before a court seeking to enforce the tax liability that the determination had been wrongly made.
The taxpayer appealed against that decision, arguing that there had to be a right of appeal because a determination had to have some way of being considered by the FTT. Further, a determination could be construed as an "assessment to tax which is not a self-assessment", so giving rise to a right of appeal under TMA 1970, s. 31(1)(d). In support of that argument he relied on FA 1994, s. 197, which provided that references in the Tax Acts and the Gains Tax Acts to a person being assessed to tax, or being charged to tax by an assessment, included a reference to his being so assessed, or being so charged, by a self-assessment or by, inter alia, a determination under s. 28C, "(which, until superseded by such a self-assessment, has effect as if it were one)".
Held, dismissing the taxpayer's appeal:
1.Section 197(1) was dealing with the construction of references in the Tax Acts or the Gains Tax Acts to a person being assessed to tax, or being charged to tax, by an assessment. It made clear in s. 197(1)(a) that being assessed or charged by a self-assessment constituted such an event. In the same way, s. 197(1)(b) made clear that being assessed or charged by a determination under s. 28C also amounted to being assessed to tax or being charged to tax by an assessment. However, s. 197 did not go as far as to define such a determination as an assessment. If the effect of s. 197(1)(b) were to equate a determination to a self-assessment, that would mean that s. 31(1)(d) of TMA 1970 would not provide a right of appeal. The FTT correctly found that a determination was not a self-assessment; it therefore acknowledged the possibility that an appeal might lie by virtue of s. 31(1)(d).
2.The words in brackets in s. 197(1)(b) of FA 1994 were merely a description of the effect of s. 28C of TMA 1970 and did not have any substantive effect. Thus the scope of the operation of s. 28C was governed by its own wording. A determination, until superseded by a self-assessment, had effect "as if it were such a self-assessment" only for the limited purposes set out in s. 28C(3). The purposes listed excluded Part V of TMA 1970, which was the part of that Act containing s. 31(1)(d). Thus the effect of s. 28C was that, for the purposes of s. 31(1)(d), a determination did not amount to a self-assessment. Therefore, if a determination could be treated as amounting to "an assessment" to tax, which was not a self-assessment, there could be a right of appeal under TMA 1970, s. 31(1)(d).
3.However, even if s. 197(1) defined a determination as an assessment, it referred only to "the Tax Acts" and "the Gains Tax Acts". The definition of "the Tax Acts" in ICTA 1988, s. 831(2) did not include TMA 1970, which was separately defined in s. 831(3) as "the Management Act". TMA 1970 formed part of what was defined in s. 118(1) of TMA 1970 as "the Taxes Acts". However, that did not make it part of "the Tax Acts".
4.There were accordingly two reasons why s. 31(1)(d) did not give rise to a right of appeal against a determination. The first was that FA 1994, s. 197(1) did not define a determination as an assessment but merely equated the process of being made subject to a determination to the corresponding process of the taxpayer being assessed to tax or being charged to tax by an assessment. The second reason was that FA 1994, s. 197(1) did not apply to TMA 1970, because TMA 1970 did not come within the definition of "the Tax Acts". The FTT was right to conclude that no appeal lay to the FTT against a determination made under s. 28C of TMA 1970. The remedies available to the taxpayer were the making of a return or resisting enforcement of the tax liability.
1.The appellant, Mr Bartram, appeals against a decision on a preliminary issue by the First-tier Tribunal ("FTT") to strike out Mr Bartram's appeal pursuant to r. 8(2)(a) of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 (SI 2009/273) ("the FTT Rules") on the grounds that no appeal against a determination under Taxes Management Act 1970 section 28Cs. 28C of the Taxes Management Act 1970 ("TMA 1970") could be made to the FTT. The decision of the FTT (Judge Charles Hellier and Nigel Collard) was released on 14 July 2011 ([2011] UKFTT 471 (TC); [2011] TC 01321).
2.As the FTT decided to strike out Mr Bartram's appeal, it made no formal findings of fact. However, it stated the background circumstances.
3.As I explained to Mr Bartram at the hearing, the only matter open for me to consider is whether the FTT's decision to strike out the appeal was correct as a matter of law. This meant that I am precluded from considering matters of fact going beyond those referred to by the FTT. I am therefore unable to take into consideration the factual history of the matter as set out in a note from Mr Bartram dated 7 February 2012, although I comment below on one matter raised in that note.
4.However, the issue for me to consider is a narrow one; it is whether an appeal can be made to the FTT against a "determination" made by HMRC under Taxes Management Act 1970 section 28Cs. 28C of TMA 1970 against a taxpayer in circumstances where the taxpayer has not made a self assessment return. For this purpose, the only information that I need to consider is that the determinations have been made; I do not need to consider the circumstances leading to the making of those determinations.
5.It is common ground as between the parties that the Respondents ("HMRC") made determinations under Taxes Management Act 1970 section 28Cs. 28C of TMA 1970 against Mr Bartram for the years to 5 April 2006, 2007 and 2008.
6.Mr Bartram's Notice of Appeal to the FTT was dated 4 October 2010. The FTT hearing to determine the preliminary issue was on 19 April 2011. The decision referred to above contained the full facts and findings; it is not clear whether any shorter form of decision was previously issued.
7.Rule 8(2)(a) of the FTT Rules provides:
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(2)The Tribunal must strike out the whole or a part of the proceedings if the Tribunal-
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(a) does not have jurisdiction in relation to the proceedings or that part of them; and
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(b) does not exercise its power under rule 5(3)(k)(i) (transfer to another court or tribunal) in relation to the proceedings or that part of them.
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8.Section 28C of TMA 1970 states:
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28CDetermination of tax where no return delivered
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(1)This section applies where-
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(a) a notice has been given to any person under section 8 or 8A of this Act (the relevant section), and
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(b) the required return is not delivered on or before the filing date.
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(1A)An officer of the Board may make a determination of the following amounts, to the best of his information and belief, namely-
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(a) the amounts in which the person who should have made the return is chargeable to income tax and capital gains tax for the year of assessment; and
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(b) the amount which is payable by him by way of income tax for that year;
and subsection (1AA) of section 8 or, as the case may be, section 8A of this Act applies for the purposes of this subsection as it applies for the purposes of subsection (1) of that section.
(2)Notice of any determination under this section shall be served on the person in respect of whom it is made and shall state the date on which it is issued.
(3)Until such time (if any) as it is superseded by a self-assessment made under section 9 … of this Act (whether by the taxpayer or an officer of the Board) on the basis of information contained in a return under the relevant section, a determination under this section shall have effect for the purposes of Parts VA, VI, IX and XI of this Act as if it were such a self-assessment.
9.Section 31(1) of TMA 1970 provides:
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31Appeals: right of appeal
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(1)An appeal may be brought against-
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(a) any amendment of a self-assessment under section 9C of this Act (amendment by Revenue during enquiry to prevent loss of tax),
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(b) any conclusion stated or amendment made by a closure notice under section 28A or 28B of this Act (amendment by Revenue on completion of enquiry into return),
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(c) any amendment of a partnership return under section 30B(1) of this Act (amendment by Revenue where loss of tax discovered), or
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(d) any assessment to tax which is not a self-assessment.
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10.Section 197 of the Finance Act 1994 ("FA 1994"), which inserted s. 28C into TMA 1970, is as...
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