No Right of Appeal to Tribunal for Determinations under Section 28C TMA

Introduction

The case of Bartram v. Revenue & Customs ([2011] UKFTT 471 (TC)) addresses the critical issue of whether taxpayers possess the right to appeal tax determinations made under section 28C of the Taxes Management Act 1970 (TMA) to the First-tier Tribunal (Tax). The appellant, Michael Bartram, challenged determinations issued by Her Majesty's Revenue and Customs (HMRC) for the fiscal years ending on April 5, 2006, 2007, and 2008, asserting that these determinations were unlawful due to non-compliance with section 28C. The respondents, representing HMRC, countered that the Tribunal lacked jurisdiction to entertain such appeals.

Summary of the Judgment

The First-tier Tribunal (Tax), presided over by Judge Charles Hellier, examined whether determinations under section 28C TMA qualify as assessments to which appeals can be made under section 31(1)(d) TMA. The appellant argued that such determinations should be considered assessments, thereby allowing an appeal. Conversely, HMRC contended that determinations and assessments are distinct, with the former not qualifying for appeals under the specified section.

After a thorough analysis, the Tribunal concluded that determinations under section 28C TMA do not equate to assessments for the purposes of section 31(1)(d). Consequently, individuals cannot appeal such determinations to the Tribunal. The decision was thus struck out as the Tribunal held it lacked the requisite jurisdiction to hear the appeal.

Analysis

Precedents Cited

The Tribunal primarily engaged in statutory interpretation, focusing on the language and structure of the Taxes Management Act 1970 (TMA). While the judgment did not rely heavily on external case law precedents, it meticulously examined the definitions and usages of "assessment" and "determination" within the TMA and related amendments. Notably, references were made to:

• Section 28C and Section 30A of TMA, highlighting the distinct provisions and terminologies used.
• Section 197 of the Finance Act 1994 (FA 1994), including its repeal by FA 1998, which demonstrated legislative intent regarding the classification of determinations and assessments.
• Section 100 and 100B of TMA Part X, which further distinguished determinations from assessments.

These statutory references underscored the legislative framework that differentiates determinations from assessments, reinforcing the Tribunal's stance that such determinations fall outside the scope of appealable assessments.

Legal Reasoning

The core of the Tribunal's reasoning hinged on the interpretation of statutory language within the TMA. The Tribunal assessed whether a determination under section 28C constituted an "assessment" as contemplated in section 31(1)(d).

• Definition Distinction: The Tribunal acknowledged that while determinations and assessments both aim to ascertain tax liabilities, the TMA explicitly differentiates them. Section 28C's use of "determination" and Section 30A's use of "assessment" with additional qualifiers suggest a legislative intent to treat them as separate entities.
• Legislative Intent: By examining the insertion patterns of sections 28C and 30A by FA 1994 and their subsequent amendment by FA 1998, the Tribunal inferred that the lawmakers intended determinations to be distinct from assessments. Furthermore, the absence of appeal provisions for determinations, as implied by the silent omission of appeal timelines in section 28C(2), supported this differentiation.
• Contextual Usage: The Tribunal reviewed other sections where "determination" and "assessment" are used to reinforce their separate applications within different procedural contexts, such as penalties and different types of tax collections.

Concluding that section 28C determinations are not assessments as per section 31(1)(d), the Tribunal determined that the Tribunal lacked jurisdiction to hear the appellant's case.

Impact

The judgment in Bartram v. Revenue & Customs establishes a significant precedent regarding the scope of appeal rights within the TMA framework. Key impacts include:

• Clarification of Terminology: The decision provides clarity on the distinction between "determination" and "assessment" within tax legislation, guiding future interpretations and applications.
• Limitation of Tribunal Jurisdiction: By affirming that determinations under section 28C cannot be appealed to the Tribunal, the ruling restricts the avenues available for taxpayers seeking redress against such determinations.
• Encouragement of Alternative Remedies: The judgment underscores the necessity for taxpayers to utilize alternative legal remedies, such as judicial review, when contesting unlawful determinations, thereby shaping procedural strategies in tax disputes.

Future cases involving similar statutory interpretations will likely reference this judgment, reinforcing the boundaries of Tribunal jurisdiction and the interpretative approaches to statutory language within the TMA.

Complex Concepts Simplified

To ensure clarity, the following legal concepts and terminologies from the judgment are elucidated:

• Determination (Section 28C TMA): A determination is an HMRC decision regarding the amount of tax payable when no tax return has been submitted by the taxpayer. It serves as a provisional tax liability until superseded by a taxpayer's self-assessment.
• Assessment (Section 31 TMA): An assessment refers to the official calculation of a taxpayer's liability, typically resulting from a completed tax return or specific HMRC procedures. Unlike determinations, assessments can be subject to appeals.
• Section 28C TMA: This section allows HMRC to issue tax determinations in the absence of a tax return, setting preliminary tax amounts based on the information available.
• Section 31(1)(d) TMA: This provision outlines the grounds on which an individual can appeal a tax assessment, specifically addressing assessments that are not self-assessments.
• Tribunal Jurisdiction: The authority of the Tribunal to hear and decide a case is derived entirely from statute. If the law does not grant jurisdiction over a particular matter, the Tribunal cannot adjudicate on it.
• Self-Assessment: A process where taxpayers calculate their own tax liabilities and submit a tax return, which HMRC then reviews and potentially adjusts.

Conclusion

The Bartram v. Revenue & Customs decision serves as a pivotal clarification in tax law, delineating the boundaries between determinations and assessments within the TMA. By establishing that determinations under section 28C do not constitute assessments eligible for appeal under section 31(1)(d), the Tribunal has firmly restricted the avenues for challenging such HMRC decisions. This ruling emphasizes the importance of precise statutory interpretation and urges taxpayers to seek appropriate legal remedies when disputing unlawful determinations.

Ultimately, this judgment underscores the necessity for taxpayers to understand the specific provisions and limitations within tax legislation, ensuring that they can navigate the complexities of tax disputes effectively.