Saxton 4 × 4 Ltd
| Jurisdiction | UK Non-devolved |
| Judgment Date | 04 January 2019 |
| Neutral Citation | [2019] UKFTT 9 (TC) |
| Date | 04 January 2019 |
| Court | First Tier Tribunal (Tax Chamber) |
[2019] UKFTT 0009 (TC)
Judge Anne Fairpo
Mr Austin and Mr Cripps, directors of the appellant and Mr Reynolds, accountant, appeared for the appellant
Mr Elliott, Counsel, instructed by the General Counsel and Solicitor to Her Majesty's Revenue and Customs, appeared for the respondents
Procedure – Strike out application – Arguments of legitimate expectation – Whether tribunal has jurisdiction – No – Appeal struck out.
[1] This is an application by the Respondents (HMRC) under rule 8(2)(a) and/or rule 8(3)(c) of the Tribunal Procedure (First-tier Tribunal) (Tax Chambers Rules) 2009 (the “Tribunal Rules”) to strike out the appellant's appeal against HMRC's decision regarding the timing of a tax deduction for a contribution by the appellant to a share incentive plan.
[2] The appellant established a share incentive plan on 6 June 2009, and the plan was approved by HMRC on 1 July 2009. The appellant subsequently made a contribution to the plan trustees who, on 6 July 2009, used that contribution to acquire shares in the parent company of the appellant.
[3] The appellant filed a corporation tax retune for the accounting period ended 6 July 2009 and apportioned the contribution to the two accounting periods ended 31 December 2008 and 6 July 2009, giving rise to a loss which the appellant claimed to carry back to the accounting periods ended 31 December 2006 and 2007.
[4] Following enquiries, HMRC issued closure notices amending the appellant's returns for the accounting periods ended 31 December 2006, 2007 and 2008. The amendments removed the deduction claimed in those periods in relation to the contribution to the share incentive plan and denied the carried back losses.
[5] The appellant appealed to the Tribunal on 29 September 2017, stating that its grounds of appeal were that HMRC had “provided guidance on the tax treatment of the transaction. HMRC do not wish to be bound by their incorrect guidance”. In particular, an HMRC officer, having consulted with a Head Office specialist, advised that the appellant could rely on the guidance.
[6] On 22 February 2018, HMRC applied to the Tribunal to strike out the appellant's appeal on the basis that the Tribunal does not have jurisdiction to consider the sole argument advanced by the appellant, which is based on a breach of legitimate expectation rather than the application of legislation.
[7] The appellant did not dispute that HMRC were correct in their interpretation of the legislation. They knew that the legislation had changed and had sought confirmation from HMRC that they could still rely on HMRC's guidance. HMRC had given that confirmation but now refused to be bound by that guidance.
[8] The appellant submitted that the tribunal has power to consider this matter under the overriding powers to deal with cases fairly and justly. They submitted that this was confirmed by Sales J in Oxfam v R & C Commrs [2010] BVC 108:
The tribunal is used to dealing with complex issues of tax law. There is no reason to think that it would not be competent to dal with issues of public law, in so far as they might be relevant to determine the outcome of any appeal
[9] The appellant submitted that HMRC's decision to amend the appellant's tax returns was so unfair as to amount to an abuse of power which, according to...
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