TC09574 - [2025] UKFTT 00852 (TC)

This tribunal is, as is often said, a creature of statute. Its jurisdiction is therefore circumscribed by statute and if the tribunal does not have jurisdiction, then neither party can confer such jurisdiction on it. And I must strike out an appeal where the tribunal has no jurisdiction.

The relevant statutory provisions are section 31 and section 32 TMA

Under section 31, an appeal may be brought against any conclusion stated in a partnership closure notice.

HMRC submits that the consequential amendment notice is not a partnership closure notice. The appellant appears to accept this. And rightly so. It is clearly not a partnership closure notice and so is outside the ambit of section 31(1)(b) TMA on the face of the legislation.

This interpretation has been endorsed by a number of tribunal decisions and most authoritatively by the Court of Appeal in Knibbs at [23]:

“Upon completion of the enquiry, HMRC issue closure notice to the partnership and, if the partnership return is amended by the closure notice, HMRC must give each partner a notice and mending the partners return: section 28B(4). The partnership can appeal against the conclusions in or amendments made by the closure notice, but the individual partners have neither that right nor a right to appeal the notice given to them under section 28B (4)”.

Mr Kelly, therefore, has no right of appeal against the consequential amendment notice.

It occurred to me during the hearing that it might be arguable that he had a right of appeal under section 31(1)(d) TMA based on the consequential amendment notice comprising an assessment of tax which is not a self-assessment. Both Mr Riaz and Mr Kelly provided written submissions on this point.

It is clear from section 30A TMA that an assessment must be made by an officer of HMRC. It seems also clear to me from the cases cited by Mr Riaz that the officer cannot (to use my terminology) “sleepwalk” into an assessment. The process of assessment requires a conscious decision to be made to assess the taxpayer, by the officer, and the subsequent recording of that assessment, originally by way of endorsing or signing a paper certificate, but currently entering the assessment into HMRC’s computer system, with the intention that that document (or its electronic equivalent) should take effect as an assessment (see Burford v Durkin [1991] BTC 9 and Corbally-Stourton v HMRC [2008] SpC 692.

There is no evidence that any such process was undertaken by an HMRC officer in respect of the consequential amendment notice. It was simply a letter, written by an HMRC officer, explaining to the appellant that HMRC had closed their enquiry into the Invicta returns for the relevant tax years, and the consequences for the appellant. It explained that his tax returns for the relevant tax years would be amended. Subsequent correspondence explained the way in which losses would be used against the appellants consequential additional income.

In my view neither the consequential amendment notice, nor any subsequent correspondence comprises an assessment which brings with it an appeal right under section 31(1)(d) TMA.

I had also thought, at the hearing, that the appellant’s appeal might fall within the ambit of section 32 TMA which brings with it a freestanding appeal right separate from the appeal rights under section 31 TMA. However, to fall within this provision, the appellant must have made a claim to HMRC that he has been assessed to tax more than once for the same “cause” and for the same chargeable period.

If, having made that claim, it is refused by HMRC, then the appeal right arises.

I sought, and was provided with, written submissions by both parties, on this point.

It is self-evident that before the appeal right arises, the appellant must have made a claim in the first place, and that claim must have been refused by HMRC.

Mr Kelly submitted that he has been in constant communications with HMRC explaining to them why, in his view, he has been overtaxed.

Having been through the documents, it seems to me that Mr Kelly's email to HMRC dated 23 March 2022 (a copy of which is embedded in his witness statement) might be construed as a formal claim that he has been assessed to tax more than once for the same cause and for the same chargeable period. And HMRC's email (the document on page 86 of the hearing bundle which I think was sent on 4 January 2024) could be construed as a refusal of that claim.

However, I was not taken to either document at the hearing, nor did either party refer to them in their submissions regarding the application of section 32 TMA. I am not, therefore, prepared to come to any conclusion as to whether there has been a claim and a refusal as is required by section 32 TMA.

But in any case, Mr Kelly’s appeal was made on 11 October 2023 and thus could not have been an appeal against any such refusal. And so cannot not be construed as an appeal made under the provisions of section 32 TMA.

Regrettably for Mr Kelly, therefore, I am forced to conclude that I have no jurisdiction to consider his appeal and therefore must strike it out. The consequential amendment notice falls outside the ambit of section 31 TMA, and his appeal could not have been made under the provisions of section 32 TMA for the reasons given above.