A special commissioner confirmed a notice issued under TMA 1970, s. 19A where the evidence required by the notice was within the plain words of s. 9A(4) and was reasonably required for the purpose of determining whether the return was correct.

Facts

The taxpayer appealed against a notice under TMA 1970, s. 19A requiring evidence of payment of the amount paid to charity between 6 April 2003 and 5 April 2004. The question in the appeal arose because FA 2002, s. 98 enabled a taxpayer to elect to treat gift aid payments as made in the previous tax year. The taxpayer's return for 2003–04 had contained an obvious error since the figure for gift aid payments related back exceeded the total payments in the year. The Revenue opened an enquiry and the taxpayer's accountants agreed that there was an error and put forward revised figures. Their letter enclosed a list of payments made in 2003–04 totalling £12,509. The inspector then asked for evidence of payment. The accountants provided evidence of the payments claimed for the year of £2,686 but declined to provide evidence of all payments made in the year because asking for evidence of payments that had been related back and allowed for the previous year was not, they considered, required on an enquiry into the return for 2003–04.

The Revenue contended that under s. 9A(4) an enquiry extended to anything contained in the return, or required to be contained in the return, including any claim or election included in the return, subject to certain limitations. Here the figure for payments made in the year was contained in the return as was the election to treat some of those as paid in the earlier year.

Issue

Whether the Revenue were entitled to require evidence of gift aid payments related back to and allowed in previous year.

Decision

A special commissioner (Dr John Avery Jones) (dismissing the appeal) said that the Revenue were entitled to rely on the plain words of TMA 1970, s. 9A(4) which provided that an enquiry extended to anything contained in the return. The total gift aid payments made in the year were contained in the return and so the enquiry extended to them.

Accordingly, although enquiring into the payments made in the year was indirectly extending the enquiry to payments allowed in the previous year, the evidence required by the notice was within the plain words of TMA 1970, s. 9A(4) and was reasonably required for the purpose of determining whether the return was correct.

(2007) Sp C 592.
Decision released 14 February 2007.