R (on the application of Derry) (Respondent) v Commissioner for Her Majesty’s Revenue and Customs (Appellant)
Case ID: UKSC 2017/0127
The correct procedure HMRC is required to follow under the Taxes Management Act 1970 (‘TMA 1970’) where it wishes to enquire into a claim for carry-back share loss relief made in a self-assessed and calculated tax return.
The Respondent sought relief for alleged losses suffered in one tax year (year 2) and sought to use the relief against his liability for income tax and capital gains tax for the preceding tax year (year 1). He did so by making a loss relief claim in his year 1 return and including the carry-back loss relief claim in his year 2 return. HMRC wished to investigate the alleged capital loss. In order to do so, HMRC was required to open the enquiry under the relevant procedure and provision of the TMA 1970. The relevant procedure depended on whether the loss relief claim was ‘included’ in the tax return: if the claim was ‘included’ in the return the enquiry has to be opened under s.9A TMA 1970. If the claim was ‘not included’ in the return the enquiry has to be opened under sch 1A TMA 1970. In the present case HMRC opened a s.9A enquiry to investigate the loss included in the year 2 return and a sch 1A enquiry into the carry-back claim made in the year 1 return. The Respondent issued judicial review proceedings arguing that the incorrect procedures and provisions had been relied on to open the enquiries undertaken by HMRC into his tax returns.
Commissioner for Her Majesty’s Revenue and Customs
James Ironmonger Derry
Lord Reed, Lord Carnwath, Lady Black, Lady Arden, Lord Kitchin
Hearing start date
12 Dec 2018
Hearing finish date
12 Dec 2018