Tinkler v Revenue and Customs

Factual and Procedural Background

Entity A opened an enquiry under section 9A of the Taxes Management Act 1970 (TMA) into the 2003/04 self-assessment return of Respondent. Respondent had previously signed a Form 64-8 appointing Company B as tax agent. On 1 July 2005 Entity A sent the formal notice of enquiry to an outdated residential address instead of the business address provided on Form 64-8, but simultaneously copied the notice to Company B.

Company B acknowledged the copy notice on 6 July 2005, corresponded with Entity A about capital-gains queries and referenced the enquiry when seeking a tax repayment. Further exchanges continued until Entity A issued a closure notice on 30 August 2012 disallowing a claimed £2.5 million loss.

Before the First-tier Tribunal, Respondent argued no valid enquiry had been opened; the tribunal held either actual knowledge or estoppel defeated that contention. The Upper Tribunal reversed on both grounds save that it dismissed the estoppel argument on statutory-protection grounds. The Court of Appeal ruled the enquiry invalid and held estoppel by convention not made out. Entity A appealed to the Supreme Court solely on estoppel.

Legal Issues Presented

1. Whether estoppel by convention prevents Respondent from denying that a valid section 9A TMA enquiry was opened.
2. Whether applying estoppel in this context would impermissibly override the statutory protection afforded by section 9A TMA.
3. Whether the parties’ post-notice correspondence constituted the requisite “mutual dealings” for estoppel purposes.

Arguments of the Parties

Entity A’s Arguments

• The five principles for estoppel by convention (Revenue and Customs v Benchdollar Ltd) as amended in Blindley Heath are satisfied: a common mistaken assumption, responsibility assumed, reliance, mutual dealings, and detriment.
• Company B’s letters of 6 July and 24 November 2005 “crossed the line,” affirming the shared assumption and inducing reliance.
• Estoppel does not undermine section 9A because that provision is permissive as to service method and the taxpayer had actual knowledge before the enquiry window closed.

Respondent’s Arguments

• Company B lacked authority to receive enquiry notices, so no common assumption was endorsed; Entity A alone generated the mistake.
• Allowing estoppel would circumvent the statutory requirement that notice be served at the taxpayer’s usual or last-known residence.
• There were no “mutual dealings” analogous to a contract; the doctrine should not apply outside such a transactional context.

Table of Precedents Cited

Court's Reasoning and Analysis

Judge Burrows, delivering the unanimous decision, confirmed that the Benchdollar principles (as refined in Blindley Heath) represent the correct legal test for estoppel by convention in non-contractual contexts. Applying those principles, the Court found:

• Shared assumption: Both Entity A and Company B operated on the belief that a valid enquiry was open.
• Responsibility and “crossing the line”: Company B’s letters of 6 July and 24 November 2005 explicitly referenced the enquiry and relied upon its validity, thereby assuming responsibility for the shared assumption.
• Reliance: Entity A refrained from issuing a fresh notice within the statutory window, influenced by Company B’s affirmation.
• Mutual dealings: Ongoing correspondence, information requests and the eventual closure notice satisfied the requirement of dealings subsequent to the assumption.
• Detriment and unconscionability: Entity A lost the opportunity to issue a valid notice; Respondent would obtain a substantial windfall if allowed to resile. Entity A’s initial mis-addressing, though careless, did not render reliance unconscionable.

The Court rejected Respondent’s two systemic objections. First, “mutual dealings” was not confined to contract-like relationships; routine enquiry correspondence sufficed. Secondly, section 9A TMA is permissive regarding service methods, so recognising estoppel did not undermine statutory purpose, particularly once Respondent had actual knowledge of the enquiry in November 2005.

Holding and Implications

APPEAL ALLOWED. Respondent is estopped by convention from denying that Entity A opened a valid enquiry, and the closure notice therefore stands.

Implications: The decision affirms the Benchdollar/Blindley Heath framework as the definitive statement of estoppel by convention and confirms its applicability to non-contractual dealings with public authorities. It also clarifies that statutory notice regimes may be engaged by estoppel where the statute allows flexibility in service and the taxpayer has actual knowledge, thereby limiting late procedural challenges of a purely technical nature.