10 March 2022

Cantina Levorato SRL v. HMRC

[2021] UKFTT 461 (TC)

This decision of the FTT is interesting because:

  1. The Appellant was an Italian company that was assessed to a UK tax on the basis of HMRC’s allegation that certain “irregularities” for the purposes of excise duty legislation had occurred in the UK element of the supply chain.  HMRC had issued a “Uniform Instrument Permitting Enforcement”, which was received by the Appellant from the Italian tax authorities.  HMRC conceded (and the FTT ruled) that this did not constitute a notification for the purposes of s 12 FA 1994.
  2. The conclusion is different from several cases following  Honig v Sarsfield,1 a Court of Appeal judgment that decided that the statutory time limit did not apply to the notice of the assessment.  For example, in Cirko v HMRC,2 the FTT had upheld the assessment, concluding that the delay of the notification (two years after the assessment had been raised) had “no bearing on the validity of that assessment”.  Here, the FTT reached the opposite conclusion.
  3. It is the first time that (as far as the authors are aware) the FTT has followed the test created by the Supreme Court in FMX Limited v HMRC3 to quash assessments.  Based on EU law, the principle states that legal certainty requires that assessments are communicated within a “reasonable time”.  Although the FTT had previously applied the test,4 it had (as far as the authors are aware) never invalidated an assessment based on it.  In this case the FTT found that the four-year delay between the raising (2013) and notification (2017) of the assessment did not represent a “reasonable time”.


1 [1986] STC 246.
2 [2019] UKFTT 0482 (TC).
3 [2020] UKSC 1.
4 Mr Stephen J Mullens v HMRC [2021] UKFTT 131 (TC).

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Increased Investment in Personal Tax Compliance in the UK (Published in Thought Leaders 4 Private Client)

Advances in technology and increased international fiscal co-operation have made global personal tax compliance initiatives pop up in abundance in recent years. To compound the issue, the Russian invasion of Ukraine and the corresponding economic fallout prompted domestic governments to increase transparency in relation to investments held by wealthy foreign individuals (with a focus on oligarchs).

In the UK, in the context of the cost-of-living crisis, public opinion certainly seems to be in favour of increased accountability for high-net-worth individuals (eg, on 9 October 2022, 63% of Britons surveyed thought that “the rich are not paying enough and their taxes should be increased”).1

HMRC is one of the most sophisticated tax collection authorities in the world and the department is making significant investments in technology in the field of compliance work; they are well placed to take advantage of new international efforts to increase tax compliance, particularly considering the already extensive network of 130 bilateral tax treaties in the UK (the largest in the world).2 The UK was also a founding member of the OECD’s Joint International Taskforce on Shared Intelligence and Collaboration (JITSIC) forum.

This article discusses the main developments in support of the increased focus on international transparency and personal tax compliance in the UK. There are other international fiscal initiatives, particularly in the field of corporate taxation, but such initiatives are beyond the scope of this article.

It should be noted that a somewhat piecemeal approach, with constant tinkering makes compliance difficult for the taxpayer and is often criticised for lacking the certainty that a stable tax system needs to thrive.

This article was first published with ThoughtLeaders4 Private Client Magazine

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