Tomlinson v Revenue & Customs

A form R40 is not a substitute for a return required under section 8 of the Taxes Management Act 1970. It is a voluntary repayment claim and does not ordinarily produce a self-assessment, establish a recoverable tax liability, or permit an enquiry under section 9A. The Revenue may require a section 8 return where the statutory purpose is engaged, even if it has received the information needed to calculate the taxpayer’s liability in another form. A section 8 notice need not name the individual officer who issued it. A description by office is sufficient, and section 113(1A) permits a notice to be issued in the name of an officer or the Board. Failure to deliver the required return attracts the statutory penalty unless the taxpayer had a reasonable excuse throughout the period of default.

The taxpayer appealed by case stated against the General Commissioners’ decision dismissing his appeal against a £100 penalty. The penalty arose from his failure to deliver a section 8 return for 2003–2004.

He had completed and delivered a form R40, which the Revenue subsequently lost. He argued that the R40 contained the necessary information, that requiring a further return was unreasonable or disproportionate, and that the section 8 notice was invalid because the issuing officer was not named.

The central issues were whether the Revenue could require a section 8 return despite receiving an R40, whether the notice was valid without naming the individual officer, and whether the taxpayer had a reasonable excuse for non-delivery.

1. Appeal dismissed. The taxpayer had no reasonable excuse for failing to deliver the section 8 return, and the £100 penalty was confirmed.
2. A form R40 is materially different from a return under section 8 of the Taxes Management Act 1970. It is voluntary, supports a repayment claim, does not itself lead to a self-assessment or recoverable tax liability, and does not enable the Revenue to open an enquiry under section 9A. It may be accepted administratively as a substitute, but only where the Revenue chooses to accept it.
3. The receipt of an R40 did not alter the underlying justification for the section 8 notice. The taxpayer’s changed circumstances, including self-employment and investment income above the relevant threshold, justified requiring a formal return with a self-assessment and the possibility of an enquiry. The loss of the R40 and the resulting duplication were, at most, an administrative error and did not invalidate or require withdrawal of the notice.
4. Section 8(1) requires the notice to be given by an officer of the Board. It does not require the individual officer’s name to appear. Section 20(2)(a) and (b) showed that Parliament could expressly require a named officer when that was intended.
5. Section 113(1A) further permitted the notice to be issued by any officer in the name of the relevant area officer or the Board. Describing the issuing officer by office rather than personal name was sufficient. The taxpayer accepted that the notice had been given by a duly authorised officer.
6. On an appeal under section 93(8), the relevant question was whether the taxpayer had a reasonable excuse throughout the period of default beginning on 1 February 2005. Since the R40 was not a proper section 8 return and the notice remained justified, no acceptable excuse was established. The Revenue’s costs were summarily assessed at £3,520.

• General Commissioners for the division of Epsom, Reigate and Tonbridge: dismissed the taxpayer’s appeal against the £100 penalty on 22 May 2006.
• High Court (Chancery Division): dismissed the appeal by case stated and upheld the penalty, substantially for the same reasons as the Commissioners.