UT/2024/000093 - [2025] UKUT 00206 (TCC)

The FTT first considered the consequences of HMRC’s power under section 255 FA 2004 to make regulations regarding assessments to tax under (amongst other statutory provisions) sections 208 and 209. It noted that the parties agreed that under the only relevant regulations in fact made pursuant to that power, there was no provision authorising the assessments under appeal: [22]. Mr Gordon, who also appeared for Mr Trachtenberg before the FTT, argued that section 255 was an exclusive provision under which Parliament had delegated to HMRC the mechanism for assessments under sections 208 and 209, and it was clear that the TMA 1970 alone did not enable such assessments, so in the absence of any applicable regulations having been made under section 255, assessments could not be made.

The FTT rejected this argument, concluding “on balance” that section 255 was a permissive rather than mandatory provision: [26].

Mr Gordon’s alternative submission was that any charges arising under section 208 and 209 did not fall within any of the three situations in respect of which an assessment was permitted under section 29(1) TMA. The only potentially relevant situation was section 29(1)(b), which refers to a discovery by HMRC that “an assessment to tax is or has become insufficient” (Footnote: ²). Mr Gordon argued that sections 208 and 209 were freestanding charges which applied to payments rather than to years of assessment, and since section 29 refers to assessments being “for a year of assessment”, such charges would fall outside of the ambit of section 29. He further contended that, notwithstanding section 30 ITA 2007, sub-paragraph (b) did not apply as the charges could not be self-assessed.

The FTT noted that Mr Trachtenberg had completed self-assessment returns for the years in question, which could only be “insufficient” within sub-paragraph (b) if the section 208 or 209 charges were required to be included in the self-assessment returns. The FTT did not accept that the words “for a year of assessment” or “for a tax year” in section 29 had “any particular magic”: [41]. The FTT stated at [42]:

The FTT considered that its conclusion was consistent with the purpose of the unauthorised payments regime: [44]. It stated at [45]:

The FTT then considered the submissions of the parties as to whether a section 209 charge must be included in a self-assessment return, taking into account that a taxpayer could apply in the same return for such a charge to be removed under section 268 FA 2004. The FTT considered it “clear from the legislation that the [s209] charge arises when a relevant payment is made and the liability continues to exist unless and until relief is granted”: [50].

The FTT set out its conclusion at [51]: