The Upper Tribunal (UT) have found in favour of a corporate taxpayer regarding an out-of-time appeal of a Landfill Tax (LT) assessment of some £57m assessed on a taxpayer.  The LT assessment was issued at the same time as a VAT assessment back in late 2016.  At the time the company was under a criminal investigation and HMRC stated in their letter of assessment, for the VAT assessment at least, that enforcement of the assessment was stayed behind the criminal investigation.

Normally taxpayers have 30 days to appeal assessment or ask for another HMRC officer who hadn’t been involved in the case to the review the assessment.  The taxpayer didn’t appeal the assessments as it understood HMRC wouldn’t proceed matter while the criminal investigation was ongoing.

Eventually the criminal investigation was dropped with no charges brought but the taxpayer then learned that HMRC would now bring enforcement proceedings against the assessments.  The taxpayer appealed to the First-tier Tribunal (FTT) but it held, on the evidence it had, that for the LT assessment the taxpayer was out-of-time.  There had been a four-year delay in appealing the assessment.  The FTT held that the appeal against the VAT assessment could proceed as HMRC had indicated that proceedings were stayed.

The taxpayer appealed to the UT who have now found in favour of the taxpayer as new evidence was allowed to be submitted.  This new evidence was emails between the taxpayer and his adviser and between officers at HMRC.  The emails included a note of conversation between the adviser and HMRC who indicated that proceedings would be stayed.

The UT found that HMRC’s letters of assessment were ambiguous and that there was a fair belief of the taxpayer that both the VAT and LT assessment were linked.  The case can be heard at the FTT and as HMRC were having to prepare for the VAT appeal, similar facts would be relevant for the LT appeal so the prejudice against HMRC was balanced.  The prejudice against the taxpayer was greater if the case hadn’t been heard considering the £57m at stake.

The decision can be found at: OCTAGON GREEN SOLUTIONS LIMITED v THE COMMISSIONERS FOR HIS MAJESTY’ S REVENUE AND CUSTOMS [2023] UKUT 00268 (TCC) – GOV.UK (www.gov.uk)

This case highlights that retaining correspondence with HMRC and notes of conversations are critical when disagreements arise.

Please contact if you have any questions on HMRC investigations or assessments.  We are experienced with negotiating with HMRC.