The LTAG claim was today granted permission by the High Court for its claim against HMRC to be heard. The date is to be fixed but is anticipated to be early in 2017.
The claim is summarised by both parties as being whether HMRC has the power to compel a taxpayer to repay a sum that had been paid out as a tax repayment without raising an assessment.
The implications are profound since assessments have time limitations which in some instances HMRC has not met.
LTAG will claim that HMRC are out of time to recoup repayments made to taxpayers that meet certain criteria. One of those criteria is that a taxpayers cannot have an open enquiry into their affairs for the relevant tax year that relief was claimed in.
This raises the question as to what is an open enquiry?
HMRC as a matter of course will typically have raised enquiries into all tax solutions and will typically have raised a Section 12AC enquiry to do so. Often solutions were structured as LLPs. S 12AC enquiries deem that all partners in the LLP are at the same time under enquiry. On closure of enquiries into the LLP, typically under S28A, those deemed partners enquiries are settled at the partner level by amendments being issued under s 28B.
For the claim being put forward by LTAG clients have standing to join the action if they received solely a s 12AC enquiry.
If on the other hand they received an enquiry into their own personal affairs under s 9A unless that enquiry has been closed then HMRC are still in time to recoup repayments made to taxpayers.
A little complex but in essence if it was only the taxpayers solution that was enquired into and that solution enquiry is closed then taxpayers can join LTAG.
Imagine a world where there is no certainty and no finality. A world where nothing needs to be settled and determined.
Happily we don’t live in that world. We have laws that are designed to provide closure. Closure either because something needs to be settled and is or closure where if nothing is done then the matter is closed automatically. In this regard there are typically deadlines for certain actions to be taken.
This is as true for the statutes that govern HMRC as it is in general law. HMRC has deadlines within which it must work.
For many taxpayers who entered into tax solutions many years ago it seems absurd that HMRC has to date not settled their personal position – albeit for some that may also be blessing if they can’t pay their likely bill. The questions is can HMRC take as long as it likes in all circumstances.
At LTAG we are claiming that this is firmly not the case. HMRC must work within it’s own legal statutes. For many tax solutions LTAG has identified that HMRC are completely out of time to recoup historic repayments made to taxpayers.
Contact LTAG to see if your circumstances mean that HMRC are out of time.