Chapter 3 – Sources

3.3.5 Legitimate Expectation. In H Murphy and another v HMRC [2023] EWCA
Civ 497, the Court of Appeal held that the taxpayer had a legitimate expectation that
HMRC concession ESC B18 applied without a six- year time limit in respect of credit
for UK income tax paid on trust income.

Chapter 4 – The Setting of the Tax System

4.3.1.2 Underpayment Surcharges. In W Archer v HMRC [2023] EWCA Civ 626,
the Court of Appeal rejected the taxpayer's appeal against late payment surcharges,
holding the taxpayer did not have a reasonable excuse throughout the entire period of
default, and the delay in paying the tax was unreasonable once the reasonable excuse
had come to an end.

4.3.2 Discovery Assessments. In Danapal v HMRC [2023] UKUT 86 (TCC), the
Upper Tribunal overturned the First-tier Tribunal for making several errors of law,
and held that if HMRC accuses a party of careless or deliberate behaviour there must
be clear evidence of what that party did or did not do.

4.4.5.4 Restitution. In HBOS and Lloyds Banking Group v HMRC [2023] UKUT 13
(TCC), the taxpayers were entitled to interest from HMRC from the time that they
would have made repayment claims had UK legislation been compliant with EU law
as opposed to the dates their claims were actually made.

Chapter 5 – Tax Avoidance

5.5.3 The GAAR. Wired Orthodontics Ltd and others v HMRC [2023] UKFTT 17
(TC) is the first case in which a court had the opportunity to consider the application
of the GAAR and the relevance of GAAR Advisory Panel’s opinions (the Panel had
concluded the entering into, and carrying out of, the tax arrangements were not
reasonable courses of action in relation to the relevant tax provisions). However, the
First-tier Tribunal ultimately reached its decision without having to consider the
GAAR and stated that the GAAR was more appropriately dealt with by a tribunal as
and when its application formed the basis of a decision. We await that case with
interest, and the wait should not be long. It is also noteworthy that the FTT concluded
that a primary purpose of the ‘highly contrived’ tax scheme involving gold bullion
was to provide tax-free cash to the Directors in circumstances where a corporation tax
deduction could also be sought. Interestingly, and somewhat controversially in this
author’s view, on this basis the FTT was satisfied that there was a duality of purpose
and denied the deduction under the ‘wholly & exclusively’ test in CTA 2009 s 54.