Erroneous claims

The taxpayers were members of a property group of companies (D) who submitted late claims for group relief for losses made by other members.

HMRC refused the claim on the basis it was out of time under FA 1998 Sch 18 para 74.

The taxpayers applied for a judicial review claiming they had made an innocent error which the Revenue had known about but not drawn to their attention. The matter should have been taken into account in the taxpayers’ favour when the taxman considered their late claim.

The High Court rejected the application; the taxpayers appealed.

The Court of Appeal said the taxpayers were entitled to know HMRC’s reasons for refusing the late losses claim but “the level of reasoning required must necessarily be less where the issues had been well canvassed and both parties knew the issues”.

In this instance the advice...