Grant Anderson v The Commissioners for HMRC [2026] UKFTT 1007 (TC)

[2026] UKFTT 01007 (TC)Case No TC 09948
FIRST-TIER TRIBUNAL
TAX CHAMBER
Hearing Heard on: 17 April 2026Date Judgment date: 03 July 2026
By remote video hearing
Appeal reference: TC/2024/04173
INCOME TAX – contractor loan scheme – whether discovery assessments and closure notice validly issued – yes – whether appellant was overcharged – no – whether the doctrine of estoppel by convention was engaged by an erroneous confirmation from an HMRC caseworker that no open enquiry existed – no – appeal dismissed
Further written submissions received: 29 April and 11 May 2026
Before
TRIBUNAL JUDGE RACHEL GAUKEDR CAROLINE SMALL
Between
GRANT ANDERSONAppellantTHE COMMISSIONERS FOR HIS MAJESTY’S REVENUE AND CUSTOMSRespondentIn person for AppellantLaurie Outten, litigator of HM Revenue and Customs’ Solicitor’s Office for RespondentsDECISION

Introduction

[1]Mr Anderson appeals against a discovery assessment for the tax year 2008-09 in the amount of £15,616.60, a further discovery assessment for the tax year 2009-10 in the amount of £14,905.80 (together, the “Assessments”), and a closure notice for the tax year 2010-11 in the amount of £21,380.40 (the “Closure Notice”).[2]HMRC issued the Assessments and Closure Notice because in the tax years in question, Mr Anderson took part in arrangements marketed by Aston Management Ltd (“AML”), a company based in the Isle of Man. These arrangements included the payment of amounts via an offshore employee benefit trust (“EBT”) with an Isle of Man trustee, under which he received sums that were described as loans (the “Loans”).[3]For the reasons given below, we have decided to dismiss the appeal and confirm the Assessments and Closure Notice.

Hearing and evidence

[4]The hearing was conducted by video link on Microsoft Teams. Prior notice of the hearing had been published on the gov.uk website, with information about how representatives of the media or members of the public could apply to observe the hearing remotely. As such, the hearing was held in public.[5]We had a 1,340-page bundle from HMRC that included their statement of case, correspondence between HMRC and Mr Anderson, documents extracted from HMRC’s online systems, witness statements and exhibits, information relating to the arrangements put in place by AML, and relevant legislation and case law. HMRC also provided a 369-page bundle containing further case law authorities.[6]We had a 228-page bundle from Mr Anderson containing his notice of appeal and supporting documents, Tribunal documents and correspondence, his response to HMRC’s statement of case, HMRC documentation relating to his case, and his witness statement. We also had both parties’ skeleton arguments.[7]Mr Anderson attended the hearing via video link, and provided oral evidence in addition to his witness statement. Ms Outten had the opportunity to cross-examine him but chose not to do so. He answered some clarificatory questions put to him by the Tribunal panel. We found Mr Anderson to be a straightforward witness and we accepted his evidence.[8]HMRC provided a witness statement from Officer Robert Dixon, who was part of an HMRC team dealing with contractor loan schemes. His responsibilities included progressing enquiries and appealed assessments for individual contractors who had engaged in certain arrangements, including those operated by AML, that operated until the tax year 2010-11. His evidence concerned the nature of the arrangements operated by AML. He was not directly involved in issuing the Assessments and Closure Notice, but gave evidence regarding the information on HMRC’s system about Mr Anderson’s case. Officer Dixon attended the hearing via video link and was cross-examined by Mr Anderson. Again, we found Officer Dixon to be a straightforward witness and we accepted his evidence.[9]HMRC also provided witness statements from two HMRC officers that had been prepared in connection with earlier cases: a statement from Officer Andrew Finch dated 3 August 2017, and another from Officer Lesley Stopp dated 11 October 2017. These statements provided information about the arrangements operated by AML. The statements also described the process used by HMRC to identify taxpayers who had used those arrangements, and to calculate and assess the outstanding tax owed by those individuals. Mr Anderson did not dispute the veracity of these witness statements, and we accepted them as evidence of the arrangements operated by AML, and of HMRC’s processes for making related assessments and enquiries.

Findings of fact

[10]Mr Anderson does not dispute that, in the tax years in question, he received income under arrangements marketed by AML. We find, based on the witness statements of the three HMRC officers (Lesley Stopp, Andrew Finch and Robert Dixon), that the arrangements operated as follows.(1) Individual users of the arrangements entered into employment contracts with AML.(2) AML entered into contracts with at least one UK intermediary that, in turn, contracted with an employment agency or end user for the provision of the individual’s services.(3) The end users paid the intermediary for the individual’s work. The intermediary paid this amount to AML, which would deduct its fees and pay the individual a relatively low wage. This wage was subject to deduction of income tax and national insurance contributions (“NICs”) under PAYE. The balance was paid to an EBT operated by AML (the “AML EBT”).(4) AML sent a “letter of wishes” to the trustees of the EBT, nominating the individual to receive benefits.(5) The EBT made payments, described as loans, to the individual, that were interest-free and expressed to be repayable on demand, but were not expected to be repaid.[11]The earnings from AML that were reported under PAYE for Mr Anderson were £7,731 for 2008-09, £11,593 for 2009-10 and £7,987 for 2010-11.[12]Forms P11D submitted for Mr Anderson in relation to his employment by AML showed that he received loans of £56,199 in 2008-09, £55,398 in 2009-10 and £71,395 in 2010-11. Mr Anderson received these amounts from the AML EBT. These are the amounts we refer to as “the Loans”.[13]Mr Anderson did not file self-assessment tax returns for the years 2008-09 or 2009-10.[14]On 24 May 2012, Mr Anderson filed a self-assessment tax return for the year 2010-11.[15]On 23 November 2012, HMRC wrote to Mr Anderson to open an enquiry into his return for 2010-11 under section 9A of the Taxes Management Act 1970 (“TMA 1970”). Mr Anderson disputed that this letter was sent. However, HMRC have supplied a copy of the letter, which was addressed to the location provided by Mr Anderson as his address in his tax return for 2010-11. The letter stated that HMRC would be checking the amounts of benefits received from Mr Anderson’s employers (AML), because information from AML showed that he had received beneficial loans of £5,891 that year, whereas his tax return showed this figure to be nil.[16]We were also provided with two letters sent to HMRC in March 2013. The first, dated 7 March 2013, was from Mr Anderson’s agent and provided information on “loans made in the year ended 5 April 2011”. The second, dated 6 March 2013, was from Mr Anderson; this referred to conversations he had had with an HMRC officer in January and February 2013, and to outstanding tax on “loan benefit” for 2010-11. We find that it is more likely than not that this correspondence arose from HMRC having opened an enquiry into Mr Anderson’s tax return for the year 2010-11.[17]We therefore find, on the balance of probabilities, that HMRC opened an enquiry into Mr Anderson’s tax return for the year 2010-11, and sent notification of this enquiry to Mr Anderson on 23 November 2012. This was within the deadline set by TMA 1970, s 9A, which in this case (because the return was submitted late) required HMRC to notify Mr Anderson of the enquiry before 31 July 2013.[18]In January 2013, an HMRC team began checking the information they held for individual taxpayers who had participated in the arrangements offered by AML. This included the P11D information submitted for Mr Anderson, and his self-assessment return for 2010-11.[19]On 4 March 2013, HMRC issued a discovery assessment under TMA 1970, s 29 for the tax year 2008-09. Mr Anderson’s then representative appealed against this Assessment on 25 March 2013.[20]On 16 December 2013, HMRC issued a further discovery assessment under TMA 1970, s 29 for the tax year 2009-10. Mr Anderson’s then representative appealed against this Assessment on 2 January 2014.[21]There then followed a long period (some eight or nine years) in which HMRC made no further progress with Mr Anderson’s appeals. We accepted Ms Outten’s explanation that this delay was primarily because HMRC were waiting for the outcome of the litigation that resulted in the Supreme Court’s judgment in RFC 2012 plc (in liquidation) (formerly Rangers Football Club plc) v Advocate General for Scotland [2017] UKSC 45 (“Rangers”), followed by the litigation that culminated in the Court of Appeal’s judgment in Hoey v HMRC [2022] EWCA Civ 656 (“Hoey”).[22]On 26 August 2022, HMRC wrote to Mr Anderson in connection with his employment by AML, explaining that in their view he had received amounts under a disguised remuneration scheme in the tax years 2008-09, 2009-10 and 2010-11, and that these amounts were liable to income tax. The letter stated that HMRC were exercising their power under section 684(7A)(b) of the Income Tax (Earnings and Pensions) Act 2003 to relieve the end users of his services from the requirement to operate PAYE in connection with his employment arrangements.[23]On 4 April 2023, an HMRC caseworker sent Mr Anderson an email responding to some questions from Mr Anderson. One of these questions was:
“Also just to confirm the year 2010/11 doesn’t seem to have any status. Is there no claim by HMRC relating to this year?”
[24]The HMRC caseworker’s response was as follows:
“I have checked our records and can confirm that an assessment was not issued for 2010/11. There was no enquiry into the 2010/11 tax return opened either.”
[25]On 20 March 2024, HMRC issued the Closure Notice under TMA 1970, ss 28A(1B) and 28A(2) for the tax year 2010-11. The Closure Notice concluded that Mr Anderson’s employment income for that year had been understated, and amended his return accordingly.[26]On 29 March 2024, Mr Anderson appealed against the Closure Notice.[27]On 25 April 2024, HMRC issued their “view of the matter” letter, which confirmed the Assessments and Closure Notice, and offered Mr Anderson a statutory review. Mr Anderson accepted this offer.[28]On 25 June 2024, HMRC issued their review conclusion letter. This upheld the Assessment for 2008-09, and the Closure Notice, but varied the Assessment for 2009-10. The variation reduced the amount of tax due for 2009-10 by £7,253.40, to £14,905.80.[29]On 24 July 2024, Mr Anderson lodged a notice of appeal with the Tribunal. On 16 December 2024, HMRC applied to the Tribunal for further and better particulars, requesting amended grounds of appeal. Mr Anderson served amended grounds of appeal on 1 January 2025.[30]On 29 September 2024, Mr Anderson made a formal complaint to HMRC about their conduct in relation to a number of claims made against him, including the Assessments and Closure Notice. The complaint extended to matters that are not relevant to this appeal, including VAT claims, accelerated payment notices, and matters relating to the tax years 2011-12 to 2018-19 inclusive. HMRC sent their response on 19 December 2024, partially upholding the complaint. Relevantly for this appeal, the complaint investigator found that HMRC had made an error in their calculations for the 2009-10 tax year.

Relevant law

[31]Section 28A of the Taxes Management Act 1970 (“TMA 1970”) provides, so far as relevant: “(1) This section applies in relation to an enquiry under section 9A(1) of this Act. (1A) Any matter to which the enquiry relates is completed when an officer of Revenue and Customs informs the taxpayer by notice (a “partial closure notice”) that the officer has completed his enquiries into that matter. (1B) The enquiry is completed when an officer of Revenue and Customs informs the taxpayer by notice (a “final closure notice”) —(a) in a case where no partial closure notice has been given, that the officer has completed his enquiries, or(b) in a case where one or more partial closure notices have been given, that the officer has completed his remaining enquiries. In this section “the taxpayer” means the person to whom notice of enquiry was given. (2) A partial or final closure notice must state the officer's conclusions and— (a) state that in the officer's opinion no amendment of the return is required, or (b) make the amendments of the return required to give effect to his conclusions. (3) A partial or final closure notice takes effect when it is issued. (4) The taxpayer may apply to the tribunal for a direction requiring an officer of the Board to issue a partial or final closure notice within a specified period. […] (8) In the Taxes Acts, references to a closure notice under this section are to a partial or final closure notice under this section.” (a) in a case where no partial closure notice has been given, that the officer has completed his enquiries, or (b) in a case where one or more partial closure notices have been given, that the officer has completed his remaining enquiries. (a) state that in the officer's opinion no amendment of the return is required, or (b) make the amendments of the return required to give effect to his conclusions.[32]TMA 1970, s 29(1) provides as follows: “(1) If an officer of the Board or the Board discover, as regards any person (the taxpayer) and a year of assessment—(a) that any income which ought to have been assessed to income tax, or chargeable gains which ought to have been assessed to capital gains tax, have not been assessed, or(b) that an assessment to tax is or has become insufficient, or(c) that any relief which has been given is or has become excessive, the officer or, as the case may be, the Board may, subject to subsections (2) and (3) below, make an assessment in the amount, or the further amount, which ought in his or their opinion to be charged in order to make good to the Crown the loss of tax.” (a) that any income which ought to have been assessed to income tax, or chargeable gains which ought to have been assessed to capital gains tax, have not been assessed, or (b) that an assessment to tax is or has become insufficient, or (c) that any relief which has been given is or has become excessive,[33]The remaining provisions of TMA 1970, s 29 include conditions that must be met by HMRC if they are to raise discovery assessments relating to tax years for which the taxpayer has submitted self-assessment tax returns. These are not relevant in this case, because Mr Anderson did not submit tax returns for the years covered by the Assessments.[34]TMA 1970, s 50(6) relevantly provides as follows. “(6) If, on an appeal notified to the tribunal, the tribunal decides— (a) that the appellant is overcharged by a self-assessment; […] (c) that the appellant is overcharged by an assessment other than a self-assessment, the assessment […] shall be reduced accordingly, but otherwise the assessment […] shall stand good.” (a) that the appellant is overcharged by a self-assessment; […] (c) that the appellant is overcharged by an assessment other than a self-assessment,

Burden and standard of proof

[35]The initial burden of showing that the Assessments were validly made rests with HMRC. If this burden is discharged, Mr Anderson bears the burden of showing he was overcharged by the Assessments.[36]The burden of proving he was overcharged by the Closure Notice rests with Mr Anderson.[37]The standard of proof is the normal civil standard of the balance of probabilities.

Discussion

[38]We have carefully considered the submissions of both parties, but have not found it necessary to refer to every argument and authority that was put to us.[39]Mr Anderson confirmed at the hearing that his challenge to the Assessments and Closure Notice concerns procedure and quantum. He does not dispute that the Loans are taxable as employment income. His grounds of appeal, as of 1 January 2025, were as follows.(1) HMRC’s claims are mathematically incoherent and procedurally flawed.(2) HMRC have failed to comply with statutory limitations and legislative frameworks, including those resulting from the 2019 Morse Review.(3) There are significant inconsistencies in HMRC’s calculations and communications, rendering the claims unsustainable.(4) HMRC should provide full and detailed calculations for all claims to ensure transparency and compliance with established legislative and procedural requirements.(5) HMRC’s complaint resolution mandates a re-evaluation of tax positions for all years, including the Tribunal’s scope.(6) The Tribunal is invited to consider similar cases where HMRC’s claims were dismissed due to procedural and mathematical deficiencies, including those arising from Loan Charge misapplications.

Validity of the Assessments

[40]HMRC's position, which Mr Anderson does not dispute, is that the Loans are employment income: they are earnings which were redirected to the EBT by AML. Consequently, the Loans fall within the redirection principle set out by the Supreme Court in Rangers at [41] and [58] – [59]. This means that a charge to income tax on employment income arose at the point at which the earnings were redirected to the AML EBT.[41]For the purposes of TMA 1970, s 29(1), HMRC discovered, as regards Mr Anderson, that income which ought to have been assessed to income tax (i.e. the full amount of the Loans) for 2008-09 and 2009-10 had not been so assessed. We find, based on the documentary evidence provided to us and the witness statements from Officer Finch and Officer Stopp, that an HMRC officer made this discovery for each of these years as part of HMRC’s process of checking the information they held for taxpayers who had participated in the arrangements offered by AML. For 2008-09, the discovery was made in January or February 2013, and for 2009-10, it was made in October or November 2013.[42]The Forms P11D filed for Mr Anderson showed that he had been paid the Loans. For each of the tax years 2008-09 and 2009-10, the officer making the discovery knew, from Mr Anderson’s PAYE records and the fact that he had not submitted tax returns for those years, that these amounts had not been fully taxed as employment income for those years. As a result, the officer reasonably formed the view that while the full amount of the Loans should have been assessed to income tax, this had not happened. This satisfies the “discovery” requirement in TMA 1970, s 29(1).[43]We do not know the identity of the officer who made the discovery, or whether it was the same officer for 2008-09 and 2009-10, because this took place as part of a process developed by the relevant HMRC team to work through a large number of taxpayers who had taken part in arrangements similar to those entered into by Mr Anderson. We note, however, that the Upper Tribunal in Hoey v HMRC [2021] STC 792 at [147] found, in the context of arrangements very similar to those operated by AML, that it is open to us to find that an HMRC officer had made a discovery, without knowing the identity of the officer in question.[44]Further, the Supreme Court’s judgment in HMRC v Tooth [2021] UKSC 17 provides authority that there is no requirement that the HMRC officer issuing the assessment should be the same as the officer who first made the discovery. It was said in that judgment at [79] that the legislation:
“…would allow for one officer to begin consideration of a file under section 29(1) of the TMA and make a discovery and then pass it on to another to complete the exercise of assessment without the second having to revisit the opinion of the first officer that there was an insufficient assessment to tax in the return.”
[45]Mr Anderson submitted that the discovery failed the test in Charlton v HMRC [2012] UKUT 770 (TCC) (“Charlton”). We are satisfied that the discovery in this case met the criteria described in Charlton as to the meaning of “discovers”. In particular, it meets the description in this often-cited passage at [37]:
“In our judgment, no new information, of fact or law, is required for there to be a discovery. All that is required is that it has newly appeared to an officer, acting honestly and reasonably, that there is an insufficiency in an assessment.”
[46]As Mr Anderson did not file tax returns for the tax years covered by the Assessments, the conditions in TMA 1970, s 29(4) and 29(5) are not relevant in this case.[47]The Assessment for the tax year 2008-09 was made on 4 March 2013, while the Assessment for 2009-10 was made on 16 December 2013. Both Assessments were therefore made within the ordinary four-year time limit set by TMA 1970, s 34.[48]Mr Anderson submitted that for much of the period covered by the Assessments, HMRC had recorded an incorrect address for him, in “Fanns Rise”. Mr Anderson said he had no association with this address. However, as there is no evidence that the Assessments were sent to this address, and Mr Anderson did not suggest that he had not received the Assessments, this submission does not assist Mr Anderson’s case regarding the validity of the Assessments.[49]Mr Anderson also took issue with HMRC’s assertion that he was resident, ordinarily resident and domiciled in the UK in the years under appeal. He submitted that he returned to the UK from New Zealand in May 2008, and began a contract in June 2008. Mr Anderson did not, however, explain how this would have resulted in him being charged too much tax: he did not, for instance, submit that he was not UK-resident at any times when he received payments under the Loans. He referred, in the hearing, to split year treatment, but did not explain how this treatment would apply in his circumstances. This means that while HMRC’s assertion may have been incorrect, Mr Anderson has not demonstrated that he was overcharged to tax as a result.[50]Mr Anderson further submitted that there were gaps in his earnings that are not reflected in HMRC’s calculations. However, what matters for the Assessments is how much money he received under the Loans, in total, in each of the tax years in question, not the regularity with which payments were made.[51]We therefore find that the Assessments were validly made. The burden is then on Mr Anderson to show that he has been overcharged by the Assessments.

Validity of the Closure Notice

[52]Mr Anderson delivered his self-assessment tax return for 2010-11 on 24 May 2012. We have found that HMRC opened an enquiry into this return on 23 November 2012. The “enquiry window” set out in TMA 1970, s 9A(2)(b) expired in this case on 31 July 2013. The enquiry was therefore opened in time.[53]The Closure Notice was not issued until 20 March 2024, more than 11 years later. Mr Anderson submitted that HMRC are barred from pursuing this claim more than four years after the relevant tax year.[54]The four-year time period is set by TMA 1970, s 34, and is relevant to discovery assessments. HMRC can issue discovery assessments for tax years in which no self-assessment return has been submitted (or in some circumstances, even where a return has been submitted, but these are not relevant in this case). As Mr Anderson did not submit tax returns for 2008-09 or 2009-10, HMRC issued discovery assessments for those years. He did submit a tax return for 2010-11, and so for that year, HMRC pursued the route of opening an enquiry into that return.[55]Once an enquiry has been opened, there is no time limit within which it must be closed. The statutory protection for taxpayers against unduly prolonged enquiries is provided by TMA 1970, s 28A(4), under which taxpayers may apply to the Tribunal for a direction requiring HMRC to issue a closure notice. In this case, Mr Anderson did not apply for such a direction and the enquiry remained open until HMRC issued the Closure Notice on 20 March 2024.[56]The Closure Notice stated that HMRC had concluded that the amounts paid by AML to the AML EBT in connection with Mr Anderson’s employment by AML were employment income, and that as a result his income for 2010-11 was understated. The Closure Notice amended the amounts of employment income on his self-assessment return to include the amounts of the Loans paid to him in that year. This fulfilled the requirement in TMA 1970, s 28A(2) for the Closure Notice to make the amendments required to give effect to HMRC’s conclusions.[57]In our view, therefore, the Closure Notice was validly issued.

HMRC’s figures and calculations

[58]Mr Anderson submitted that there are significant inconsistencies in HMRC’s calculations and communications, and that these make the claims unsustainable. He sought to substantiate this submission by reference to the following circumstances.[59]As we have found above, HMRC revised the Assessment for the tax year 2009-10, reducing the amount of tax due by £7,253.40, to £14,905.80. Mr Anderson submitted that this creates substantial discrepancies without sufficient explanation or supporting calculations.[60]HMRC’s review conclusion letter of 25 June 2024 included a calculation that showed the basis on which HMRC had calculated the revised amount of tax due for 2009-10. This calculation was provided to us in the Respondent’s Document Bundle, at page 62. This shows “other income” of £55,398, being the amount of the Loans made to Mr Anderson in that year, as shown in the relevant Form P11D. The calculation shows how this amount, taken together with other relevant information such as his other pay and tax deducted, gave rise to the figure of £14,905.80.[61]We therefore do not accept that HMRC have not explained their tax claim for 2009-10, or provided a supporting calculation.[62]As to the reason that the Assessment for 2009-10 was originally issued in the wrong amount, we accepted Officer Dixon’s explanation that it was calculated by simply applying a 40% tax rate to the total Loans for that year. The Loans for 2009-10 totalled £55,398; 40% of that is £22,159.20, and this was the amount of the original Assessment. This figure did not, therefore, take account of Mr Anderson’s actual circumstances, such as his total income for the year (and therefore his entitlement to the personal allowance and basic rate of income tax), and the tax he had paid under PAYE. This error was not picked up when HMRC issued their “view of the matter” letter, but was detected by HMRC’s reviewing officer, and corrected in the review conclusion letter issued on 25 June 2024.[63]Mr Anderson submitted that the fact HMRC revised their original figure casts doubt on the reliability of the figure they are now seeking to collect. He was also critical of the way that in some of their submissions to the Tribunal, HMRC presented their case on the basis of the revised figure, without acknowledging that their original calculation was wrong.[64]We have seen no evidence that HMRC’s actions in this case cast doubt on the revised calculation for 2009-10 sent with HMRC’s review conclusion letter. It is not disputed that the original calculation was wrong. This was rightly picked up by HMRC’s internal review process. The question for the Tribunal is whether Mr Anderson is overcharged by the Assessment, in its current form. In our view, for the reasons we have given, he is not.[65]In relation to the Closure Notice (for 2010-11), Mr Anderson submitted that while HMRC had calculated his employment income on the basis that he had received Loans totalling £71,395, this did not take account of a letter written by AML on 7 March 2013. This letter included the following:
“The information you have requested is as follows: 1. Total loans made in the year ended 5 April 2011 £71,394 2. Amount of loans repaid £22,355 3. Date of loan repayments 27 April 2011”
[66]HMRC’s position, which Mr Anderson did not dispute, was that the Loans fell within the redirection principle set out in the Rangers case, meaning that a charge to income tax on employment income arose at the point at which the earnings (being the monies that were used to fund the Loans) were redirected to the AML EBT. Mr Anderson did not develop his submission to explain by what authority this charge would be removed, or reduced, by a subsequent loan repayment.[67]We had no evidence regarding these loan repayments, beyond the letter from AML from which we have quoted above. We do not know which loans are referred to in this letter, the identities of the parties to the repayments, or the circumstances in which the repayments were made. We are therefore unable to make any findings of fact regarding these loan repayments, and as a result, these repayments cannot provide a basis for disturbing our conclusion that Mr Anderson was not overcharged by the Closure Notice.[68]In any event, we agree with HMRC that Rangers at [41] and [58] - [59] provides authority that the charge to income tax arose at the point when the Loan amounts were paid by AML to the EBT. This is the case irrespective of whether the Loans were paid by the EBT to Mr Anderson, or were subsequently repaid. This is made clear in the following passage from the judgment of the Court of Session in Advocate General of Scotland v Murray Group Holdings Ltd [2015] CSIH 77 at [61]: “The redirection of earnings occurred at the point where the employer paid a sum to the trustee of the Principal Trust, and what happened to the moneys thereafter had no bearing on the liability that arose in consequence of the redirection”.[69]Mr Anderson further submitted that the Closure Notice includes a mathematical error, in that the stated liability is £21,380.40, which wrongly includes an overpayment of £724.60 which should have been deducted, not added as a liability. According to Mr Anderson, such errors invalidate the credibility of the Closure Notice.[70]We do not consider there is anything in this submission. The Closure Notice shows that the total income tax due for 2010-11, once the Loans for that year are included as employment income, was £20,655.80. Mr Anderson’s self-assessment tax return for 2010-11 showed that the tax deducted from his income under PAYE had resulted in him paying too much income tax: an overpayment of £724.60. The tax shown as due on the original return was therefore effectively a negative number (i.e. a repayment): the difference between this and the amount of tax HMRC calculated to be correctly due is therefore £21,380.40.[71]Mr Anderson also made the general submission that HMRC should provide full detailed calculations for all their claims. However, this submission misunderstands the burden of proof in this case. HMRC have satisfied us that the Assessments and Closure Notice were validly issued; it is then for Mr Anderson to show that he has been overcharged.[72]The original Assessment for 2008-09 was accompanied by a tax calculation; a revised calculation for 2009-10 accompanied the review conclusion letter sent on 25 June 2024; and a calculation for 2010-11 was sent with the Closure Notice on 20 March 2024. If Mr Anderson wishes to challenge these calculations, he would need to show that they are incorrect. As he has not done so, he has not discharged the burden of showing he has been overcharged.[73]A related submission by Mr Anderson was that TMA 1970, s 29(1) requires HMRC to make the Assessments to the best of their judgment. By the time of the issue of the Assessments, the requirement in TMA 1970, s 29(1) for HMRC to make assessments to the best of their judgment had been replaced by the wording set out above (under the heading “relevant law”). The statutory requirement (both now and at the time of the issue of the Assessments) is for HMRC to make an assessment in the amount, or the further amount, which ought in their opinion to be charged to make good the loss of tax. In our view, HMRC have satisfied this requirement, by making assessments based on the amounts of the Loans in the years under dispute.[74]Mr Anderson repeatedly asserted that payments he has already made have not been properly recorded or taken into account by HMRC. We understand some of these payments were made under accelerated payment notices (“APNs”).[75]This appeal is concerned with the Assessments and the Closure Notice: whether they were validly issued, and whether Mr Anderson was overcharged by them. It is not concerned with the APNs. The amounts Mr Anderson has already paid, and the way HMRC have recorded these amounts and allocated them against particular tax years or liabilities, do not affect the questions we must decide about the Assessments and Closure Notice. These are matters Mr Anderson must pursue with HMRC; they are not for this Tribunal.[76]In conclusion on this point, we find that the Assessments and the Closure Notice calculated Mr Anderson’s income tax liability for the three years under appeal on the basis that the full amounts of the Loans were employment income. Mr Anderson has not convinced us that this resulted in him being overcharged to tax, and therefore, subject the matters covered in the remainder of this decision, the Assessments and Closure Notice are confirmed.

The Morse Review

[77]Mr Anderson submitted that legislative changes made following the 2019 Morse Review excluded loans taken before 9 December 2010 from the loan charge regime. As the tax years 2008-09 and 2009-10 pre-date this cut-off, Mr Anderson submitted that the Assessments are invalid. For the same reason, he submitted that the Closure Notice (for 2010-11) was invalid in so far as it relates to loans made before 9 December 2010.[78]The loan charge was introduced by the Finance (No. 2) Act 2017 as a measure to counter arrangements under which employees were remunerated by means of loans, with the intention of reducing liabilities to income tax and NICs. The loan charge operated by bringing all relevant outstanding loans into charge in one year. Sir Amyas Morse carried out a review of the loan charge in 2019. One of the recommendations of the review was that the loan charge should not apply to loans made before 9 December 2010.[79]Paragraph 4.9 of the Morse Review stated as follows:
“The Review supports the use of Rangers, and other relevant judgments, to allow HMRC to pursue loan schemes entered into by both employers and individuals before 9th December 2010, should it wish to do so and where the legal principles established in the relevant caselaw apply. It should not, however, be able to apply the leverage of the Loan Charge in doing so. In keeping with the usual statutory position, HMRC will be able to recover tax from such cases when they opened an investigation and so protected a relevant year.”
[80]A protected year was defined in the review as a year for which HMRC had protected their position by opening an enquiry within the relevant time limits, had made a valid discovery assessment, or were still in time to do so. The review noted that HMRC’s position was that amounts relating to those years would be collected through their normal compliance and litigation activity, without using the loan charge.[81]The Assessments and Closure Notice did not rely on the loan charge mechanism of bringing all outstanding loans into charge in one year, but were made under HMRC’s normal assessment and enquiry powers. The Assessments were made before the enactment of the Finance (No. 2) Act 2017, and were issued within the normal four-year limit for making discovery assessments. The Closure Notice was issued pursuant to a notice of enquiry that was issued on time on 23 November 2012. We are not aware of, and Mr Anderson did not direct us to any, legislative provisions that would take the Loans outside the scope of income tax purely on the grounds that they were (in whole or in part) made before 9 December 2010.[82]As a result, even if the 2019 Morse Review were binding on us, it does not support Mr Anderson’s case. Nor are we aware of any legislative changes made as a result of that review that would invalidate the Assessments or Closure Notice.

HMRC’s complaint resolution

[83]Mr Anderson’s grounds of appeal state that “HMRC’s complaint resolution …mandates a re-evaluation of tax positions for all years, including the tribunal’s scope.”[84]We have reviewed the letter from HMRC dated 19 December 2024, in which they responded to the complaint made by Mr Anderson on 29 September 2024. This letter includes the following statement at paragraph 1.4:
“I have asked the counter avoidance team to contact you separately to respond to this point and your sub-points. They will provide a statement of your tax position from 2008-2009 to date and re-evaluate liabilities.”
[85]While Mr Anderson did not direct us to a specific paragraph within HMRC’s response letter, we assume that this is the paragraph to which this ground of appeal refers. We further assume (in the absence of detailed submissions from Mr Anderson on this point) that the reference to the “tribunal’s scope” means that the tax years referred to in this extract include the years that are the subject of the present appeal.[86]While we would expect that HMRC would abide by the terms of their letter and provide the promised information, this Tribunal does not have general supervisory powers over HMRC. Our role is limited to considering the matters for which Parliament has provided a right to appeal to the Tribunal: here, to deciding whether the Assessments and Closure Notice are valid, and whether Mr Anderson has been overcharged. We do not have the power to direct HMRC to complete actions that were promised in their complaint resolution letter.

Abuse of process

[87]Mr Anderson submitted that HMRC’s conduct, including patterns of errors, constitutes an abuse of process under Rule 8(3)(c) of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009 (“Tribunal Rules”), warranting strike-out. He further submitted that the extraordinary delay of 12 years between the end of the tax year 2010-11 and the issue of the Closure Notice is unconscionable, prejudicing him through loss of records and faded recollection, breaching principles of fairness.[88]Mr Anderson referred to what appear to be two previous Tribunal decisions in support of these submissions. He cited one of these cases as Emeny v HMRC [2022] UKFTT 282 (TC), where according to Mr Anderson, HMRC was directed to close an enquiry due to unreasonable delay. Mr Anderson did not supply us with a copy of this case, and we have been unable to locate it. As we have not been able to identify this authority, we attach no weight to this submission.[89]Mr Anderson also referred to a case that he cited as Foulser v HMRC [2013] UKFTT 430 (TC), in which, again according to Mr Anderson, HMRC’s repeated failures were seen as unfair. We have been unable to identify this citation but think this may be a reference to Foulser v HMRC [2011] UKFTT 642 (TC), which was subsequently appealed to the Upper Tribunal and reported as Foulser v HMRC [2013] UKUT 38 (TCC) (“Foulser”).[90]In that case, HMRC had arrested the appellants’ adviser on the morning of the First-tier Tribunal hearing, and the appellants alleged that this (and the surrounding circumstances) was an abuse of process by HMRC. The Upper Tribunal held at [50] that the First-tier Tribunal had jurisdiction to consider whether HMRC’s actions meant that a fair hearing was no longer possible. Conversely, any contention that HMRC acted unlawfully in public law would need to be made by an application for judicial review, and such an application is not within the jurisdiction of the First-tier Tribunal.[91]While Mr Anderson did not make detailed submissions on the Foulser case (and indeed we are only surmising that this is the case to which he wished to refer), he did not submit that any of HMRC’s alleged failures had prevented him from receiving a fair Tribunal hearing. This is not, therefore, a decision that assists Mr Anderson’s case.[92]It is well established that the Tribunal has no general jurisdiction to discharge an assessment on grounds of fairness: see HMRC v Hok Ltd [2012] UKUT 363 (TCC). As regards the delay prejudicing Mr Anderson through loss of records and faded recollection, we observe that the Assessments were made, and the enquiry opened, within the normal time limits. The Assessments made clear that HMRC were seeking to impose income tax on the full amount of the Loans.[93]Mr Anderson has not specified what records he may have lost, but if, for instance, he had evidence that the information held by HMRC regarding the amounts of the Loans was wrong, he could have provided this to HMRC at the time. Alternatively, if he had any such evidence, it would be reasonable to expect him to have preserved it, given that he had appealed the Assessments and that disproving HMRC’s figures would allow him to succeed in those appeals.[94]We therefore reject Mr Anderson’s submission that we should strike out HMRC’s case on the grounds that their conduct constituted an abuse of process.

Estoppel by convention

[95]It was not disputed that on 4 April 2023 an HMRC officer emailed Mr Anderson and stated that HMRC had not opened an enquiry into Mr Anderson’s tax return for the year 2010-11. In accordance with our findings of fact above, this statement was untrue, as HMRC had opened an enquiry into that return on 23 November 2012. The enquiry concluded when HMRC issued the Closure Notice on 20 March 2024.[96]Mr Anderson’s skeleton argument for the hearing drew attention to the email of 4 April 2023, submitting that this demonstrated that HMRC had made contradictory statements regarding the existence of an enquiry. He said that he had relied on this statement in good faith during reconciliation of prior errors, and that if he had known there was an open enquiry he would have asked more questions to resolve the position.[97]At the hearing, we told the parties that we would ask them for written submissions as to whether the doctrine of estoppel by convention, as developed by the Supreme Court in the case of Tinkler v HMRC [2021] UKSC 39 (“Tinkler”), is engaged in this case. This doctrine was not addressed in either party’s skeleton argument. We had anticipated that the parties would not make submissions on this topic at the hearing, and that was indeed the position.[98]We wrote to the parties after the hearing to invite written submissions as to whether HMRC were estopped by their previous statement from resiling from that position by issuing a closure notice. We received HMRC’s written submissions on 29 April 2026, and Mr Anderson’s on 11 May 2026.

Additional findings of fact

[99]On 29 April 2026, together with their written submissions, HMRC provided the Tribunal with further documents that were not provided at the hearing. Mr Anderson received these documents before making his own written submissions. This meant that Mr Anderson was able to, and did, make representations about the reliance the Tribunal should place on these additional documents, and the significance of their not having been provided at the hearing. Having reviewed these documents, and considered Mr Anderson’s submissions, we make the additional findings of fact set out below.[100]We note that some of the documents on which these findings are based constitute evidence that reinforce our original finding, set out above, that HMRC opened an enquiry into Mr Anderson’s tax return for 2010-11 on 23 November 2012. However, while Mr Anderson had the opportunity to make representations on the documents supplied by HMRC on 29 April 2026, we are mindful that they were not available at the Tribunal hearing. We have therefore left our original findings of fact undisturbed, to demonstrate that we would have decided that a valid enquiry existed even if we had not seen these additional documents.[101]HMRC provided notes of telephone conversations that took place between Mr Anderson and members of HMRC personnel on 7 and 25 January 2013. Mr Anderson said that we should treat these with caution, as they were short notes prepared by HMRC, which he had not verified or signed. We did not find these notes of assistance and have placed no reliance on them.[102]Our additional findings of fact are as follows.(1) On 7 January 2013, HMRC wrote to Mr Anderson to inform him that they were extending the scope of the enquiry to include the arrangements entered into under his employment contract with AML, pursuant to which he received sums of money in the form of loans or expenses.(2) On 30 January 2013, HMRC wrote again to Mr Anderson with a provisional tax calculation for 2010-11, stating that £1,178.20 was due on his loan benefit from AML. The letter stated:
“At this stage the calculation is not final. It may change later depending upon the outcome of my check of the arrangements you entered into with AM Ltd. It is likely to be several months before I am able to complete my check.” (3) On 21 March 2013, after receiving the letters from Mr Anderson and his agent referred to in paragraph [16] above, HMRC sent a further letter to Mr Anderson explaining that they would review the information they had received and would write further when they had had the opportunity to consider all the circumstances of the arrangements used during the year. The letter continued: “In the meantime, please feel free to contact me if there is anything you would like to discuss about my enquiry, your return or the arrangements you used.” (4) On 23 March 2016 (three years later), HMRC wrote to Mr Anderson as follows: “I understand from my colleague that you have made a claim for the repayment of the credit shown on your Self-Assessment statement of £501.37. I am writing to let you know that because there are ongoing enquiries into your returns for the years ended 5 April 2011 and 5 April 2014, plus assessments currently under appeal for the years ended 5 April 2009 and 5 April 2010 any arising repayments are being withheld until the enquiries and assessments have been settled.”
[103]HMRC submitted that, before the Closure Notice was sent, their caseworker contacted Mr Anderson to inform him that this notice would be issued. However, we were provided with no evidence of this communication, or of the date on which it took place, and so we make no findings as to whether this contact took place.

Discussion on estoppel by convention

[104]In Tinkler at [45], Lord Burrows approved the following statement of the principles applicable to the doctrine of estoppel by convention set out in HMRC v Benchdollar Ltd [2009] EWHC 1310 (Ch) at [52], with one amendment: “(i) It is not enough that the common assumption upon which the estoppel is based is merely understood by the parties in the same way. It must be expressly shared between them. (ii) The expression of the common assumption by the party alleged to be estopped must be such that he may properly be said to have assumed some element of responsibility for it, in the sense of conveying to the other party an understanding that he expected the other party to rely upon it. (iii) The person alleging the estoppel must in fact have relied upon the common assumption, to a sufficient extent, rather than merely upon his own independent view of the matter. (iv) That reliance must have occurred in connection with some subsequent mutual dealing between the parties. (v) Some detriment must thereby have been suffered by the person alleging the estoppel, or benefit thereby have been conferred upon the person alleged to be estopped, sufficient to make it unjust or unconscionable for the latter to assert the true legal (or factual) position.[105]The amendment made by Lord Burrows was that in relation to the “common assumption” in the first of these principles, “something must be shown to have 'crossed the line' sufficient to manifest an assent to the assumption” (see Tinkler at [50]).[106]In MWL International Ltd v HMRC [2026] UKUT 62 (TCC) (“MWL”), HMRC made an assessment for NICs in respect of cars treated by the taxpayers as “pooled cars”, contrary to an agreement made with an HMRC inspector in 1993. The taxpayers contended that HMRC were estopped by convention from resiling from that agreement.[107]The Upper Tribunal accepted, at [25]-[26], that estoppel by convention can in principle operate against HMRC, but the circumstances in which it will do so are limited. The starting point is to identify the statutory provisions against which estoppel by convention is sought. If those provisions impose a positive duty for the public benefit, estoppel cannot prevent the performance of that duty, nor can it be invoked to achieve what contract could not [40]. This applies not only where the statutory provision imposes a duty, but also where it confers a power or discretion [40(5)].[108]In Tinkler, the Supreme Court decided that estoppel by convention applied so that the taxpayer (Mr Tinkler) was estopped from denying that a valid enquiry had been opened. In this case, the reverse situation applies in the sense that it is the taxpayer, Mr Anderson, who argues that HMRC should be estopped from enforcing the Closure Notice.[109]We have carefully considered both parties’ written submissions and have concluded that Mr Anderson’s case does not satisfy the principles approved by Lord Burrows in Tinkler, and that as a result the doctrine of estoppel by convention is not engaged. Our reasons are as follows.[110]We note that for estoppel by convention to apply, all five of the principles approved by Lord Burrows must be satisfied. It follows that we do not need to reach a conclusive view on all five: if any is failed, the doctrine does not apply. We have found it convenient to begin by considering the third, fourth and fifth principles, which may be summarised in the context of this case as follows:(1) Mr Anderson must have relied on HMRC’s statement that no enquiry into his tax return for 2010-11 had been opened, to a sufficient extent, rather than on his own independent view.(2) That reliance must have occurred in connection with some subsequent mutual dealing between Mr Anderson and HMRC.(3) Mr Anderson must have suffered some detriment as a result of that reliance, sufficient to make it unjust or unconscionable for HMRC to assert the true position, which was (as we have found) that HMRC did open an enquiry on 23 November 2012.[111]Mr Anderson submitted that once HMRC’s caseworker had told him there was no open enquiry, he treated the year 2010-11 as closed. He was denied the opportunity to challenge the scope or validity of the enquiry, engage with HMRC’s calculations, or seek professional advice, before the enquiry had concluded with the issue of the Closure Notice.[112]As to whether he suffered detriment, Mr Anderson drew attention to the fact that the Closure Notice was issued on “radically different grounds” to those set out when the enquiry was first opened. In their letter of 23 November 2012, HMRC stated that the enquiry would concern beneficial loans of £5,891, which gave rise to a tax charge of £1,178.20, whereas the Closure Notice assessed tax of £21,380.40. Mr Anderson submitted that he was denied any opportunity to engage with this transformation.[113]It is our view that in the circumstances of this case, Mr Anderson did not suffer sufficient detriment as a result of the caseworker’s erroneous statement for it to be unjust or unconscionable for HMRC to resile from that statement.[114]He was not denied the opportunity to challenge the scope or validity of the enquiry, engage with HMRC’s calculations, or seek professional advice, because he was able to (and in fact did) appeal the Closure Notice when it was issued. We do not accept that he would have been in a better position if he had taken any of these actions after 4 April 2023 but before the figure in the Closure Notice had (in Mr Anderson’s words) “crystallised”.[115]HMRC are entitled, under TMA 1970, s 9A(4), to enquire into anything contained in a tax return. Any calculations they might have chosen to share with him prior to issuing a closure notice would have been provisional. Mr Anderson’s potential actions in the window between 4 April 2023 and the issuing of the Closure Notice on 20 March 2024 would have been limited to applying to the Tribunal for a full or partial closure notice under TMA 1970, s 28A(4). It is unlikely that any such application, even if successful, would have been determined significantly before 20 March 2024.[116]Moreover, Mr Anderson was, or should have been, on notice prior to 4 April 2023 that HMRC had an open enquiry for the tax year 2010-11, and were investigating his use of the AML arrangements in that year. We make this finding based on:(1) HMRC’s letters of 30 January 2013 and 21 March 2013, in which they stated that they were continuing to consider the arrangements he entered into with AML in relation to his tax return for 2010-11.(2) HMRC’s letter of 23 March 2016, which stated unequivocally that there was an ongoing enquiry for 2010-11.(3) HMRC’s letter of 26 August 2022, which stated that they believed Mr Anderson had used a disguised remuneration scheme in the tax years 2008-09, 2009-10 and 2010-11.(4) The Assessments for 2008-09 and 2009-10, which were made on the basis of charging the entire amounts of the Loans to income tax.[117]Having considered this evidence, we do not think Mr Anderson could reasonably have concluded, prior to 4 April 2023, that HMRC would not seek to tax him on the full amount of the Loans he received in 2010-11. As a result, the various actions that Mr Anderson asserts he would have taken had he not received the erroneous email on 4 April 2023, could have been taken before that date. He submits that if the caseworker had told him, on 4 April 2023, that there was an open enquiry, he would have taken immediate action, but he did not explain why he failed to take this action following the positive statements made to him by HMRC in 2013, 2016 and 2022.[118]Mr Anderson submitted that the injustice in this case was compounded by the length of the delay between the opening of the enquiry on 23 November 2012, and the issuing of the Closure Notice on 20 March 2024. We accept that this is a significant length of time. However, as we have found, no statutory time limit was breached. We have accepted HMRC’s explanation that the delay occurred because they were waiting for the conclusion of the litigation first in Rangers, and then in Hoey. As we have found above, it was not the case that there was no communication between Mr Anderson and HMRC in that period: HMRC sent letters in 2013, 2016 and 2022 demonstrating that they did not regard Mr Anderson’s tax position for 2010-11 as settled. We therefore do not consider the lapse of time in this case to be sufficient reason to conclude that it was unjust for HMRC to issue the Closure Notice.[119]On the question of injustice, we consider it is also relevant to recall that by issuing the Closure Notice HMRC were seeking to impose tax on the basis that the Loans constituted employment income, and that Mr Anderson has not disputed this point. Through the Closure Notice, therefore, HMRC are seeking to assess the correct amount of tax on a substantive basis that Mr Anderson has not disputed, even if he disputes their procedures and calculations. In the circumstances of this case, we do not consider that a single erroneous statement should prevent HMRC from collecting this tax. It follows that the fifth principle approved by Lord Burrows is not satisfied.[120]We also found no evidence of any mutual dealing between Mr Anderson and HMRC between 4 April 2023 and the issue of the Closure Notice. Mr Anderson submitted that this was entirely attributable to the caseworker’s statement that no enquiry had been opened: if he had known that this statement was incorrect, he would have engaged with the issue immediately. Nonetheless, the absence of subsequent mutual dealing means that the fourth principle is also not satisfied.[121]As the fourth and fifth principles identified by Lord Burrows are not satisfied, the doctrine of estoppel by convention is not engaged. It is therefore unnecessary for us to consider the parties’ submissions on MWL, the extent to which estoppel by convention may be invoked against a public body, or the significance of TMA 1970, s 9A being a procedural, rather than a substantive, provision.[122]Mr Anderson further submitted that we should consider the question of estoppel in the light of what he described as HMRC’s “broader pattern of unreliable positions and contradictory statements” in this appeal. He referred to the original incorrect calculation of the Assessment for 2009-10, which he described as resulting from HMRC’s use of an “invalid 40% flat rate methodology”. He submitted that although HMRC’s reviewing officer had corrected the mistake, they had mischaracterised the reason for the overcharge. He contended that HMRC should not be able to dismiss their caseworker’s email of 4 April 2023 as unreliable, while expecting the Tribunal to accept their other internal records at face value.[123]We do not accept that HMRC’s reviewing officer mischaracterised the reason for the overcharge. The review conclusion letter issued on 25 June 2024 stated as follows:
“For the tax year ending 5 April 2010, the original discovery calculation was made with reference to the loan amount only. However, HMRC held information which detailed your taxable earnings and tax paid within the year. When considering this information, the discovery assessments appear to have over-assessed your income for this tax year. As a result, HMRC’s view of the matter in respect of the tax due for the tax year ending 5 April 2010 is hereby varied.”
[124]While this passage does not refer expressly to a 40% rate, it is consistent with our findings as to why the original calculation was wrong. The original calculation was “made with reference to the loan amount only” in the sense that it took the amount of the Loans for that year and charged tax at 40% of that figure, without reference to the other information held by HMRC on Mr Anderson’s earnings and tax payments for that year. The reviewing officer therefore corrected this mistake by recalculating the Assessment.[125]In the context of estoppel by convention, we understood Mr Anderson’s submission to be that it would be unjust to allow HMRC to pick and choose which of their internal records can be relied upon. However, we do not accept that this is what HMRC are seeking to do. The original Assessment for 2009-10 was wrong, and was corrected by HMRC’s reviewing officer. The statement in the caseworker’s email on 4 April 2023 was also incorrect; we do not consider it would be in the interests of justice for us to hold HMRC to this incorrect statement on the grounds that they have made, but corrected, other mistakes in this case in the past.[126]Therefore, Mr Anderson’s submissions regarding HMRC’s alleged unreliable positions and contradictory statements do not alter our decision on the doctrine of estoppel by convention.

Disposition

[127]For the reasons we have given, we confirm the Assessments and Closure Notice, and dismiss the appeal.

Right to apply for permission to appeal

[128]This document contains full findings of fact and reasons for the decision. Any party dissatisfied with this decision has a right to apply for permission to appeal against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal) (Tax Chamber) Rules 2009. The application must be received by this Tribunal not later than 56 days after this decision is sent to that party. The parties are referred to “Guidance to accompany a Decision from the First-tier Tribunal (Tax Chamber)” which accompanies and forms part of this decision notice. Release date: 03 July 2026