No error of law

The taxpayer worked in the UK for a Danish company from 1994 to August 2003. His contract described him as an employee but the firm did not deduct tax from payments made to him. He completed his tax returns on the basis he was self-employed.

The First-tier Tribunal (FTT) decided the taxpayer’s returns were incorrect: his income arose from employment rather than self-employment. His claim for error or mistake relief under TMA 1970 s 33 was not be allowed because it was likely the PAYE liability would have exceeded the tax paid on the returns.

The taxpayer appealed against the decision saying there was no evidence to support the tribunal’s finding. HMRC said the Upper Tribunal (UT) did not have the jurisdiction to hear the appeal because of the limited right of appeal in s 33(4)

The department asked the UT to decide this as a preliminary...