Hostname: page-component-586b7cd67f-g8jcs Total loading time: 0 Render date: 2024-11-27T19:37:28.242Z Has data issue: false hasContentIssue false
  • English
  • Français

The Revenue Giveth—The Revenue Taketh Away

Published online by Cambridge University Press:  16 January 2009

Daniel Sandler
Get access

Extract

Tax legislation is probably the lengthiest and most complex legislation enacted in the United Kingdom. But the sheer volume of the legislation has not brought certainty of meaning or predictability of application. The legislation is seriously wanting in clarity and simplicity. The Commissioners of Inland Revenue are responsible for the “collection and management of the inland revenue”, and “have all necessary powers for carrying into execution every Act of Parliament relating to inland revenue”.

Type
Shorter Articles
Information
The Cambridge Law Journal , Volume 53 , Issue 2 , July 1994 , pp. 273 - 281
Copyright
Copyright © Cambridge Law Journal and Contributors 1994

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

1 Inland Revenue Regulation Act 1890, ss. 1(1) and 1(2).

2 “Revenue Practice” refers to “the way in which the Inland Revenue applies the tax system (as embodied in current tax legislation and interpreted by the courts) in cases where that system— (i) is unclear or silent in any respect, or (ii) is considered deficient, unjust, not in accordance with the spirit of the tax legislation in question or impracticable to administer, but is capable of remedy by an appropriate concession, or (iii) confers some discretion in its operation on the Inland Revenue. In short, interpretation, concession and discretion …” (M. Gammie, “‘Revenue Practice’: A suitable case for treatment?’ [1980] B.T.R. 304).

3 E.g., Revenue Department Press Releases, Inland Revenue Tax Bulletin, Statements of Practice, Extra–statutory concessions and various guidance booklets.

4 Sir Sir Wade, William, Administrative Law, 6th ed. (Oxford, 1988), pp. 261–264, 381–387. In the context of income tax, see e.g., Brodie's Trustees v. I.R.C. (1933) 17 T.C. 432; Liberty & Co. Ltd. v. l.R.C. (1924)Google Scholar 12 T.C. 630.

5 Vestey v. I.R.C. (Nos. 1 and2) [1980] A.C. 1148, 1173.

6 R. v. I.R.C., ex parte National Federation of Self–Employed and Small Businesses Ltd. [1982] A.C.617

7 Ibid. 651.

8 [1985] A.C. 835.

9 Ibid. 866–867. (per Lord Templeman); see also Lord Scarman at 852.

10 Hinds, W., “Estopping the Taxman” [1991] B.T.R. 191, 193Google Scholar.

11 [1990] 1 W.L.R. 1545.

12 See, e.g., Income and Corporation Taxes Act 1988, ss. 215, 225 and 707.

13 [1990] 1 W.L.R. 1545, 1569. Revenue Practice concerning interpretation or discretion certainly would be included within this principle. Concessions also appear to be covered, although they are a little more problematic. They, in effect, “disapply” statutory provisions (although always in favour of the taxpayer), rather than interpret them. While concessions were heavily criticised by the House of Lords in Vesley, supra n.5, they were implicitly recognised as within the managerial discretion of the Inland Revenue by Lord Scarman in the Fleet Street Casuals Case, supra n.6, at 652, and explicitly recognised as “falling well within the concept of good management or of administrative common sense” by McNeill, J. in R v. Inspector of Taxes, ex pane Fulford–Dobson [1987] 1 Q.B. 978, 988Google Scholar.

14 [1990] 1 W.L.R. 1545, 1569–1570.

15 [1994] 1 W.L.R. 334, confirming [1993] S.T.C. 773.

16 It was never suggested, by any of the nine judges who heard the case, or the Revenue, that Matrix or its advisers acted in bad faith.

17 [1993] S.T.C. 773, 779.

18 Ibid. 783.

19 Ibid. 780.

20 Ibid. 797 (per Dillon L.J.) and 799 (per Nolan L.J.). Both considered the disclosure in this case to be inadequate.

21 [1994] 1 W.L.R. 334, 346.

22 Ibid. 352.

23 Ibid. 355.

24 Ibid.

25 Ibid., 346. Cf. R. v. I.R.C. ex pane Camacq Corporation [1990] I W.L.R. 191 (C.A.), [1989] S.T.C. 785 (Q.B.D., C.A.), where a Revenue ruling was withdrawn three weeks after it was issued, before the taxpayer undertook the transaction which was the subject of the ruling. At first instance, Kennedy J. suggested that, by analogy with estoppel, there was no evidence of any significant harm done in the period before the clearance was revoked. No argument of legitimate expectation or unfair abuse of power was raised on the appeal. The issue of damages following the revocation of a ruling raises interesting considerations, but unfortunately is beyond the scope of this article.

26 Ibid 358.

27 [1962] A.C. 782.

28 [1985] A.C. 645.

29 Ibid., 657.

30 Ibid., 658. Following Olin, the Inland Revenue issued a Statement of Practice (SP 8/91) outlining its use of discovery assessments. Paragraph 12 of the Statement suggests that there may be situations not involving an appeal of an assessment (and therefore outside the scope of the principles established in Cenlon and Olin) where a discovery assessment will not be made following a specific agreement with an inspector.