United Kingdom Special Commissioners of Income Tax Decisions

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URL: http://www.bailii.org/uk/cases/UKSPC/2004/SPC00448.html
Cite as: [2004] UKSC SPC00448, [2004] UKSC SPC448

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Taylor v HM Inspector Of Taxes [2004] UKSC SPC00448 (09 December 2004)

SPC00448

INCOME TAX — notices to produce documents and provide information — TMA 1970 s 19A — taxpayer agreeing to provide documents and information relating to income and claimed deductions — appeal stood over for further consideration of demand for documents relating to expenditure.

THE SPECIAL COMMISSIONERS

PAUL TAYLOR Appellant

- and -

CYRIL BRATHERTON (HM INSPECTOR OF TAXES) Respondent

Special Commissioner: Colin Bishopp

Sitting in public in Manchester on 19 November 2004

The taxpayer in person

John Cormack of the Inland Revenue Northern England Regional Appeals Unit for the respondent

REASONS FOR DECISION

This is an appeal by Paul Taylor, who works in Macclesfield, Cheshire, as a taxi driver, against two notices served on him in accordance with s 19A of the Taxes Management Act 1970. Each notice was issued on 6 July 2004; one relates to the taxpayer's 2001/02 return and the other to his 2002/03 return. I informed the parties at the conclusion of the hearing what my provisional decision was; there now follow my reasons.

So far as material, s 19A reads as follows:

"(1) This section applies where an officer of the Board gives notice of enquiry under section 9A(1) or 12AC(1) of this Act to a person ("the taxpayer").

(2) For the purpose of the enquiry, the officer may at the same or any subsequent time by notice in writing require the taxpayer, within such time (which shall not be less than 30 days) as may be specified in the notice-

(a) to produce to the officer such documents as are in the taxpayer's possession or power and as the officer may reasonably require for the purpose of determining whether and, if so, the extent to which –

(i) the return is incorrect or incomplete, or

(ii) in the case of an enquiry which is limited under section 9A(5) or 12AC(5) of this Act, the amendment to which the enquiry relates is incorrect, and

(b) to furnish the officer with such accounts or particulars as he may reasonably require for that purpose ...

(6) An appeal may be brought against any requirement imposed by a notice under subsection (2) above to produce any document or to furnish any accounts or particulars ...

(9) On an appeal under subsection (6) above section 50(6) to (8) of this Act shall not apply but the Commissioners may -

(a) if it appears to them that the production of the document or the furnishing of the accounts or particulars was reasonably required by the officer of the Board for the purpose mentioned in subsection (2) ... above, confirm the notice under that subsection so far as relating to the requirement; or

(b) if it does not so appear to them, set aside that notice so far as so relating.

(10) Where, on appeal under subsection (6) above, the Commissioners confirm the notice under subsection (2) ... above so far as relating to any requirement, the notice shall have effect in relation to that requirement as if it had specified 30 days beginning with the determination of the appeal."

It emerged during the course of the hearing, at which the taxpayer represented himself, that he had encountered some difficulty in providing all of the information required by the inspector because he had not been able to extract it all from the computer on which he maintained his records. It also emerged that he felt somewhat aggrieved that, as he perceived it, the Revenue official in charge of the enquiry had come to the unwarranted conclusion that he had concealed, or at least understated, some of his income. That is not a matter on which it is either possible or relevant for me to adjudicate at this stage; the only matter before me is whether the notices were properly issued and whether I should set them, or any part of them, aside.

Fortunately, by the time of the hearing, there was some measure of agreement between the parties. The documents requested of the taxpayer can conveniently be divided into two categories: those relating to his income and those relating to his expenditure. The latter, as I understood it, had been requested principally in case the former did not provide sufficient and reliable evidence of the taxpayer's income and of his allowable expenses. The taxpayer did not object to the production of documents relating to his income and, he said, he had already provided most of the information and documents requested, albeit after the notices were issued.

So far as the documents and information specified in the notices relate to the taxpayer's income and allowable deductions, I uphold the notices. To the extent that the taxpayer has already provided the documents or information, he need do no more than indicate to the inspector, on request, where in the material he has provided they are to be found. In any case in which he has not provided the documents or information, he is to do so within 30 days of the release of this decision.

The taxpayer's objection to the production of documents relating to his expenditure was founded upon article 8 of the European Convention for the Protection of Human Rights and Fundamental Freedoms, enshrined in United Kingdom law by the Human Rights Act 1998. That article provides that "everyone has the right to respect for his private and family life, his home and his correspondence." The taxpayer's argument would have been that the proviso to the article, permitting the interference by a public authority with that right in certain circumstances, did not apply in this case.

It appeared to me, even disregarding the provisions of article 8, that the inspector's request was intrusive and that the taxpayer should not be required to divulge details of his personal expenditure if that could be avoided. I accordingly decided to stand over the appeal for further argument, should that prove necessary. If the inspector is satisfied with the documentation relating to his income and deductible expenditure which the taxpayer has provided, or provides following this decision, the matter need go no further. If he is not so satisfied, I grant him permission to restore the appeal for further argument in order that a decision may be made whether the taxpayer is required to comply with any additional part of the notices.

COLIN BISHOPP

SPECIAL COMMISSIONER
Release Date: 9 December 2004

SC/3088/2004