The jurisdiction of the special and general commissioners with regard to a challenge to the issue of a notice under TMA 1970, s. 19A was limited to determining whether the production of the information was reasonably required for purposes of determining whether the taxpayer's return was correct and complete, and it was outside the commissioners’ jurisdiction to consider whether the issue of the notice was wholly unreasonable in view of the taxpayer's ill health.

Facts

The Revenue made enquiries into the taxpayer's self assessment returns for the years to 5 April 2004 and 2005. In a letter of 15 August 2006 the taxpayer's agent informed the Revenue that the taxpayer had been diagnosed with cancer and that he would be undergoing surgery in the following week to be followed by chemotherapy. A notice of enquiry under TMA 1970, s. 9A had been sent to the taxpayer's agent on 9 August 2006 requesting sales and purchase ledgers and cash books, supporting documentation such as purchase invoices and expense records, bank and credit card statements, cheque book stubs and paying-in books.

The date for providing the information was set as 18 September 2006. When the Revenue received the agent's letter of 15 August, they wrote offering to collect any documents from the taxpayer's home and extending the deadline until 2 October 2006. Following a further letter from the taxpayer's agent suggesting (among other things) that the enquiry be put off until April 2007, the Revenue wrote on 27 September extending the deadline until 9 November 2006, explaining the reasons for continuing with the enquiry and suggesting that the taxpayer provide mandates so that the Revenue could request bank and credit card statements.

The day before the 9 November deadline the Revenue tried to call the taxpayer's agent in the hopes of helping in the production of the information rather than issuing a formal notice. The message received by the Revenue was that the agent was busy and requested a written message from the Revenue. In the circumstances, the Revenue decided the better course was to issue a formal notice under TMA 1970, s. 19A on 13 November, i.e. 93 days after the initial request, with a deadline of 19 December 2006.

The taxpayer appealed contending that in view of his ill health, known to the Revenue at the time of issue of the notice, the notice did not reasonably require the documents or particulars requested. In the circumstances the Revenue had been unreasonable in pursuing the enquiry as quickly as they had. They should have deferred the enquiry and not issued the notice in order to support the taxpayer's recovery. In any event the time allowed for compliance in the original notice had been inadequate and inconsistent with the sympathetic treatment afforded to other taxpayers such as flood victims.

Issue

Whether the issue of the s. 19A notice was a wholly unreasonable act in view of the taxpayer's state of health and whether the time limit for compliance was inappropriate and not proportionate to the nature of the enquiry.

Decision

The special commissioner (Sir Stephen Oliver QC) (dismissing the appeal) said that the special and general commissioners had the express jurisdiction under s. 19A(9) to determine whether the production of the documents or information or the furnishing of the account or particulars was reasonably required for the purposes of determining whether the taxpayer's return was or was not correct and complete. It was conceded in this case that the documents and information set out in the s. 19A notice were reasonably required.

However, the tribunal did not have the authority to set aside the s. 19A notice on grounds such as the alleged unreasonableness of the issue of the notice in the light of the taxpayer's known ill-health or the time allowed for compliance. The only control given to the commissioners was to set the notice aside if it related to documents and information that were not reasonably required for the purposes of the enquiry. But whether the Revenue had acted reasonably in issuing the notice and setting the compliance date in relation to a request for particular documents and information that were reasonably required was a different matter. It went to the question of whether the Revenue had, in the particular circumstances, acted in accordance with principles of good administration by issuing such a notice. That went outside the commissioners’ jurisdiction which was confined to the particular situation described in s. 19A(9). Accordingly, this was not a proper case to set aside the notice. In any event, in the present circumstances the Revenue had acted reasonably.

(2007) Sp C 650.
Decision released 20 November 2007.