UKFTT 275 (2009) Hannigan v HMRC

Assessments and striking out - Taxpayer won in part

Case Summary:

The taxpayer had failed to provide self assessment returns for 10 years.  HMRC raised determinations in estimated amounts which he failed to pay.  Mr Hannigan was made bankrupt owing £29,524.33.

Mr Hannigan’s accountant subsequently provided HMRC with completed returns for all the years covered by the bankruptcy petition.  For 2001/02 to 2005/06 HMRC accepted the returns and made statutory adjustments.  For the earlier years the returns were out of date, but HMRC accepted them under the procedure known as “equitable liability”.  This reduced the debt to £1,885.08, comprising unpaid Class 2 national insurance contributions of £765.08 in respect of Mr Hannigan’s self employment from May 1999 to May 2005, and costs of the bankruptcy petition of £1,120. HMRC then dropped the Class 2 NIC demand.

It was Mr Hannigan’s wish to then have his bankruptcy annulled. His purpose in making the tax appeal was to obtain a decision that the original tax determinations had been wholly excessive and that HMRC could not have honestly and bona fide, after due care and diligence, believed the tax to have been due.

However, there were no open appeals, and the letters he had written which he described as appeals were written after the assessments were withdrawn. Despite the fact that HMRC had withdrawn the Class 2 NIC demands, the judge said the appeals had to be determined and that was done in Mr Hannigan’s favour.