Taylor (dec’d) v HMRC [2013] UKFTT 483 (TC)

Analysis

Mr J G Taylor was appointed as the executor of his father’s estate. HMRC wrote to Mr Taylor and asked him whether he wished to complete a full return or complete a form R27 to deal with his father’s final tax affairs. Mr Taylor chose to complete a form R27 and returned this. Correspondence between the parties ensued and three calculations were issued. Each was headed as a ‘calculation’. Mr Taylor was unhappy with the final calculation and appealed to the tribunal.

HMRC submitted that there was no appealable decision as the figures were calculations not formal assessments. An assessment is legally enforceable whereas a calculation is not. In order to appeal the calculation Mr Taylor should complete a full return. On this basis HMRC submitted that the tribunal had no jurisdiction to review the calculation and should strike out the claim under r8(2)(a)
Tribunal Procedure Rules (First-tier Tribunal)(Tax Chamber) Rules 2009 (the Rules).

Mr Taylor stated that it was clearly arguable that an informal calculation could be an assessment. If this was not the case then, in his view, it left the taxpayer without recourse to appeal. This could not fall in line with natural justice principles.

The tribunal’s first and only consideration was whether the ‘calculation’ was in fact an assessment. If it was not an assessment then under the Rules there was no jurisdiction to hear an appeal.

Held (striking out the appeal):

1. (1) While there is no statutory definition of an ‘assessment’ the Taxes Management Act 1970 (the Act) provides a number of requirements which must be complied with in order for a ‘calculation’ to be considered an assessment. These requirements include s30A of the Act which states that an assessment should include a time frame for appeal. This requirement was not satisfied on the calculations nor were the other requirements under the Act. This strongly indicated that the ‘calculation’ was not an assessment.
2. (2) If a taxpayer does not agree with a calculation made under a form R27 his remedy is to complete a full self-assessment return. The R27 is designed to reduce the work necessary to finalise a deceased’s tax affairs in simple cases. There is always a risk that a full return will have to be completed. While noting that it is unfortunate that HMRC did not insist on the completion of a self-assessment return given the deceased complex tax affairs, the tribunal was satisfied that the calculation was not an assessment.
3. (3) The tribunal had no jurisdiction to deal with an appeal against a calculation and the appeal was struck out under r8(2)(a) of the Rules.

JUDGMENT Introduction [1] Mr John Grayson Taylor (Mr Taylor) is the executor of Mr John Taylor (his father) and wished to advise the respondents (HMRC) of the tax liability or otherwise arising from his father’s death. The return for the year 2008/9 was issued to his father and HMRC wrote to Mr Taylor on 5 …

Continue reading "Taylor (dec’d) v HMRC [2013] UKFTT 483 (TC)"