The petitioners reclaimed against an interlocutor refusing their petition for judicial review of the refusal of the Commissioners to abide by an agreement reached with them.
Held: The Revenue were permitted, in exercise of a managerial discretion, to resile from an agreement made with a taxpayer as to forward tax.
The Lord President, giving the judgment of the court, stated: ‘Parliament imposed tax on actual transactions. Since that was so, a compromise required to relate to actual transactions, for it was in relation to them that the respondents were entitled to collect tax. A forward tax agreement did not involve the taxation of taxable transactions that had occurred. It did not involve the agreement and collection of a compromise sum in relation to an existing liability to tax. It involved the agreement to pay and accept a fixed sum in respect of future transactions which might or might not occur. The sum was unrelated to the amounts involved in future transactions. It was arbitrary, and did not relate to the actual level of taxation which was due on transactions. It particularised the exact sum which was to be paid, but without the respondents having any inkling as to the actual level of taxable transactions.’
As to back tax, however: ‘In that context they have power to arrange a compromise with the taxpayer, taking into account such factors as may be relevant.’
Judges:
Lord President, Lord Kirkwood, Lord MacLean
Citations:
[2004] ScotCS 278, [2004] STC 1703, 77 TC 273
Links:
Jurisdiction:
Scotland
Cited by:
Cited – Valentines Homes and Construction Ltd, Regina (on The Application of) v HM Revenue and Customs CA 31-Mar-2010
The claimant had applied for judicial review of a decision by the defendant to seek to recover a debt from them. The issue had however been settled in the County Court. Costs were ordered against them, and they now appealed. In a small company the . .
Lists of cited by and citing cases may be incomplete.
Taxes Management
Updated: 22 July 2022; Ref: scu.279602