This morning the Supreme Court delivered a decision that dismissed the De Silva appeal.
De Silva had appealed that HMRC had used an incorrect enquiry process to invalidate his claim and that his claim should stand. The Supreme Court ruled that HMRC had, in his specific circumstances, acted lawfully.
The Supreme Court also ruled that the Cotter case gives no support to the taxpayers in this appeal, De Silva and those stood behind De Silva.
The LTAG team will be reviewing the judgement with legal counsel in great detail to determine its application to the range of fact patterns LTAG claimants have. We would expect to be in a position to provide guidance to LTAG members in two weeks.
The De Silva claim against HMRC that was heard at the Supreme Court on June 22nd will receive its judgement on Wednesday Nov 15th.
The LTAG team will carefully review this judgement to determine its implications, especially on those who have made carry back claims, and those who are part of S54 agreements with HMRC. We will also review what the judgement may imply for HMRC’s powers of recovery.
To the best of our knowledge there are no other cases in the High Court, Court of Appeal or Supreme Court diaries relating to HMRC’s powers of recovery. The LTAG case will therefore be the deciding case in regard of what HMRC needs to lawfully do in order to recover repayments made to taxpayers.
On June 20th the Court of Appeal in Mr James Derry vs HMRC ruled that while HMRC are correct in trying to use various enquiry remedies at their disposal they need to do so in a manner which is procedurally correct. In the Judgement the Justices comment that there is a need for HMRC to take “obvious steps” to remedy an “erroneous” repayment. If they fail to do so then a repayment made for a particular tax year is by default permitted.
While the circumstances of Mr Derry differ to the LTAG claim this judgement makes it clear that the Court’s are willing to allow taxpayer claims against HMRC if there are substantive statutory procedural grounds.
The LTAG claim, while complex, has substantive statutory grounds.