Out of Time Appeal Allowed – C Davison v HMRC

A recent case concerned an application for an appeal relating to years that would normally be outside of the appeal window.
Background and Facts
The taxpayer’s returns for 1997/98 and 1998/99 were amended by HMRC after she had left the UK to live in Spain.  HMRC were informed of her departure (after the enquiries were raised) but continued attempting to contact the taxpayer at her old address for the next three years.
Assessments were also raised by HMRC for 2000/01 and 2001/02, and having located Mrs Davison’s details in Spain were able to deduct funds from her Spanish bank account.  In 2008, she telephoned HMRC receiving confirmation that the tax due on the assessments for those two years had been incorrectly raised and that the tax was not due.
Mrs Davison therefore asked for a refund of the tax, however HMRC said this was not possible as tax was still due on the earlier assessments for the years 1997/98 and 1998/99. This was the first she had heard of the earlier year assessments as they had not been sent to her in Spain.
The representative for HMRC indicated that if she wanted a repayment they would seek payment for the tax due and she might lose the case. As a result, she believed that by not pursuing the matter further it would be resolved (as suggested by HMRC).  This was confirmed by HMRC’s internal notes, which stated they “now consider this case closed”.
She applied for a repayment in 2012 having returned to the UK but this was refused by HMRC because of the outstanding 1997/98 and 1998/99 liabilities.
She therefore sought to appeal the assessments which HMRC claimed were now out of time.
In making its decision the Tribunal noted that HMRC could have confirmed the assessments for 1997/98 and 1998/99 were still due at any point from 2001 until 2011 but had not done so.
Mrs Davison was reasonable in her belief that the assessments had been vacated, and therefore would have had no reason to think she needed to appeal.
The application for the right to appeal out of time was allowed.
The case shows the importance of taxpayers asserting their rights and challenging HMRC’s occasionally draconian application of the rules on appeals.  It is worth remembering that out of time appeals can be sought in suitable circumstances.