Third party submitted fraudulent tax return

A third party completed and submitted the taxpayer’s return for him to claim reimbursements of travel costs. The return also included claims for seed enterprise investment scheme and enterprise investment scheme relief. The taxpayer said he had neither approved nor agreed the tax returns submitted - he had discussed enterprise investment scheme relief claims with the third party but declined to claim because he could not afford the relevant investments. It transpired that HMRC made the tax payments to the third party or their associates the taxpayer had not received the full amounts and had been the victim of fraud.

On a later review of the returns HMRC concluded the relief was not due and issued assessments to recover the repayment. The taxpayer appealed saying he should not have to repay the tax because he had not received the repayments.

HMRC applied to have the taxpayer’s...