On 5th April 2018 the First Tier Tribunal (Tax Chamber) delivered judgment in Patel v HMRC [TC/2016/06084]. The decision establishes that tax returns submitted voluntarily by taxpayers and not in response to a notice from HMRC requiring a taxpayer to file a return were not returns made under S.8(1) of the Taxes Management Act and that HMRC could not therefore open an enquiry into the return under S.9A nor issue a closure notice under S.28A. The enquiry and closure notices issued to the Appellants in this case were consequently found to be invalid. The decision is of great significance as it also made clear that HMRC’s “collection and management powers” under S.1 TMA and S.5 & S.9 of the Commissioners of Revenue and Customs Act 2005 did not provide any power on the part of HMRC to treat a voluntary return as if it had been submitted in response to a notice by HMRC to file. The decision will affect a significant number of taxpayers against whom HMRC has opened enquiries in response to voluntary returns.
James Ramsden QC acted for the successful Appellants leading Conrad McDonnell of Grays Inn Tax Chambers.
For the full judgment see here