Benham (Specialist Cars) Ltd | KPMG | UK

Benham (Specialist Cars) Ltd – First-tier Tribunal decision

Benham (Specialist Cars) Ltd

This case concerned the statutory basis under which HMRC could make amendments to a company tax return.


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In this case, the taxpayer made a claim under s153A TCGA 1992 for rollover relief on business assets that ceased to take effect when no relevant business assets were acquired within the time limits against which to set the gain. HMRC wrote to the taxpayer to amend the company’s return for that period in order to tax the gain, and the taxpayer appealed to the First-tier Tribunal (FTT) on the basis that HMRC should have instead raised a discovery assessment under paragraph 41 Schedule 18 FA 1998. This would have allowed the taxpayer to make a claim to carry back trading losses to reduce their corporation tax liability for the relevant period to nil.

The FTT agreed with the taxpayer that if a company makes a declaration under TCGA 1992 s 153A (in effect a provisional claim) but fails to follow up with an actual claim, HMRC have to use the assessment or amendment powers in FA 1998 Sch 18, as appropriate. They cannot rely on s153A(4)(a) to amend the self-assessment independently of what Sch 18 says. In this case, as HMRC had not opened an enquiry into the return, they could not amend it and could only proceed by making a discovery assessment. The distinction was important because HMRC’s approach would have deprived the company of the possibility of claiming to carry back a loss from the subsequent period to cover the additional liability.

The FTT concluded that the disputed decision, though not a nullity, was ineffective because it lacked statutory basis, and as there was no right of appeal against it, the appeal had to be struck out.

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