TC09594 - [2025] UKFTT 00893 (TC)

In summary Mr Spencer submitted as follows:

A taxpayer can accept HMRC’s offer of a review under section 49C TMA even if they have failed to take an opportunity to ask for a review under section 49B TMA.

The proper construction of the Valentine’s Day letter (the test being how the reasonably objective reader would construe it) is that it is a request for an independent review. This request was made in response to an offer of a review made by HMRC.

Although that offer was made in the view of the matter letter, which is dated 16 November 2022, that offer was not effective until the error regarding the date of the closure notice was corrected by HMRC which was not until 31 January 2023 (Daarasp vHMRC [2021] UKUT 87 at [25] (“Daarasp”)). That was the effective view of the matter as it was the first time HMRC stated completely their view of the matter in question.

Alternatively, in their letter of 31 January 2023, HMRC extended the deadline for the appellant to accept the offer until 2 March 2023.

In either case, therefore, the offer was accepted on 14 February 2023 and was therefore in time.

HMRC v Raftopoulou [2018] EWCA Civ 818 (“Raftopoulou”) deals with the second limb of section 118 (2) TMA. It does not shed light on what is required to be done in the context of an offer of review by HMRC which is a different provision from the repayment claim made in that case. There is no bright line test that the first limb applies only to something which is required to be done.

HMRC officers are empowered to extend time notwithstanding that the First-tier Tribunal held to the contrary in Indigo Media Partnership v HMRC [2015] UKFTT 0424 (“Indigo”). In Mr Spencer’s view this was incorrect, and in any event, section 118 (2) TMA was not argued or considered in that case.

In summary Mr Riaz submitted as follows:

The Valentine’s Day letter cannot be construed as the acceptance of an offer by HMRC for a statutory review. Its wording is ambiguous, and it refers to the letter of 16 December 2022 in which BP say they do not want a peer review.

There are no legislative provisions which allow an HMRC officer to extend the time limit set out in the relevant TMA legislation. This is supported by Indigo.

Raftopoulou deals with both the first and second limbs of section 118 (2) TMA. A unilateral request for a review, or the acceptance of an offer of a review made by HMRC, are not “required to be done” within the meaning of that section. Where an offer of review is made by HMRC, a taxpayer has a choice whether or not to accept it. If the taxpayer decides not to, then it can either appeal to the tribunal, or can choose not to.

It would have been apparent to the reasonably objective reader that the reference in the view of the matter letter to the date of the closure notice was a typographical error. BP and the appellant were fully aware that the issue identified by the closure notice concerned the loss of tax relief relating to shares in Pylorus. They had only made one appeal, and that was against the closure notice. They knew there was only one closure notice and that was the one issued on 11 December 2020. It also refers to the independent review which was something dealt with in the appellant’s appeal letter of 16 December 2020.

Given that the Valentine’s Day letter did not accept HMRC’s offer of a review, even if I was to accept that the deadline was extended until 2 March 2023 by virtue of HMRC’s letter of 31 January 2023, no formal request for a review was made until, at the earliest, 20 November 2023. So still outside the extended deadline.