People need guidance from the Government in order to comply with all sorts of official obligations, because the law itself is lengthy, complex and frankly inaccessible to most people. For us, the key obligations to consider are dealing with HM Revenue & Customs (HMRC) on tax and tax credits matters, but you also need to consider others such as correctly claiming state benefits.
As information moves from HMRC and other Government Department websites to the GOV.UK website, LITRG has commented on the large extent to which it has been simplified and abridged – to the extent that some of it is incomplete or even misleading.
If you look something up on GOV.UK and then act upon the information you find there – for example, you use the guidance to:
- fill in boxes on your tax return;
- claim a tax repayment;
- claim tax credits; or
- notify (or equally decide that you do not need to notify) a change in circumstances for tax credits
we recommend that you print and keep or electronically save a copy of the website page, or take a screenshot. This could be extremely important if it later turns out that you made an error by relying on the guidance – it could help you argue that penalties should not be charged, for instance.
On the other hand, based on the information you read, you may decide that you need do nothing: you might decide, for example, that you cannot make a claim to tax credits or are not entitled to claim a certain expense for tax purposes. This is a more difficult area, but if you decide not to take any action based on the guidance available we suggest you also keep a copy of the guidance you looked at with the relevant date that you checked the guidance. This will help if you find out at a later date that you should have taken some action but did not because the guidance did not cover your situation, was misleading or incorrect.
Below we examine some of the issues in more detail, in the context of preparing a self-assessment tax return.
Relying on published guidance for tax purposes
How do I prepare my tax return?
This is not a trick question – in most cases, it is a case of taking figures provided by a third party, for example, your employer, and putting the figures in the relevant boxes of the tax return (assuming you are happy that the figures look correct). If you are self-employed, this is not quite so simple. Nevertheless the records you have kept should enable you to complete your tax return in most cases.
But what if there’s something I am not sure about?
This is where it gets interesting. You can pay a tax professional for advice if you can afford to, but this might not be an option for many low-income taxpayers, so you may choose to research the issue yourself. You might phone HMRC, look at the HMRC website (though this is soon to be fully migrated to GOV.UK) or look at GOV.UK. Once you have found your answer, then you can complete your tax return.
Later, if HMRC ask you a question about your tax return, you will be able to refer to the guidance you were given – and you may think that is the end of the matter. Unfortunately it may not be, so it is important to know the extent to which you might rely on advice or guidance.
At the moment, much of the information from the HMRC website is being transferred to GOV.UK. At the same time some of it is being rewritten and the content is changing on a regular basis. It is therefore crucial that you keep a clear record of what you have relied on.
HMRC’s position on guidance offered by them
HMRC’s website provides the following information: “Our starting point is therefore that you should be able to rely on any information or advice we provide. However for information or advice you have received to be considered binding on HMRC, when contacting HMRC you must set out all the relevant facts and draw attention to all the issues.” That sounds promising!
They continue: “The underlying principle is that HMRC has a duty to collect the correct amount of tax as required by statute. In the vast majority of cases advice we give will be correct in law and therefore binding on HMRC. However there are some circumstances in which our primary duty to collect tax according to the statute may mean that we can no longer be bound by advice we have given.” This sounds less promising!
When and to what extent can I rely on guidance received?
The answer depends on what you asked, the context of the question and where you obtained your answer. This does not mean you cannot rely on what you are told or what you find out from published material but it does mean you need to take some care. For example, if you need clarification of a point, you need to make that clear if you telephone for help and provide all of the relevant information. Similarly, if you intend to rely on information on the HMRC website or GOV.UK, you need to make sure you have read the material carefully to see if there are any exceptions to the general rule.
Nevertheless, where HMRC (or another Government body) has made public statements about how a matter will be dealt with then you can have a legitimate expectation that that is how the matter will be dealt with.
If you have decided to continue your search into the HMRC Manuals, that are available online, you need to be aware that these manuals are prepared for the use of HMRC staff and you cannot rely on them to the same extent.
What if HMRC do not now agree with the guidance I was given?
HMRC will often amend guidance as soon as they become aware it is incorrect (though we understand they do not have the same degree of control over information held on GOV.UK), but that is of little use to you if you have relied on it in the meantime, especially where you may not know that the guidance has changed.
HMRC’s view is that they need to be fair to the taxpaying public as a whole so will try to collect any tax they think is due. But HMRC also have a duty of care towards taxpayers. Previously this was a duty of “care and management” by the Board of the Inland Revenue. While, following the merger of the Inland Revenue and HM Customs & Excise in 2007 to create HMRC, this duty has become one of “collection and management”, there is still a responsibility on HMRC not to mislead taxpayers. You may have to dispute the position with HMRC.
In a case in the courts, R v Inland Revenue Commissioners, ex parte MFK Underwriting Agencies Ltd and related applications  STC 873, Lord Justice Bingham said “So if, in a case involving no breach of statutory duty, the Revenue makes an agreement or representation from which it cannot withdraw without substantial unfairness to the taxpayer who has relied on it, that may found a successful application for judicial review.”
Similarly, Lord Wilson said in another case, R (on the application of Davies and another) v Revenue and Customs Commissioners; R (on the application of Gaines-Cooper) v Revenue and Customs Commissioners  UKSC 47, “The Revenue accepts first that, were it in the booklet to have made the representations about the circumstances … that, for so long as the representations remained operative, an individual would have had, and therefore have been able to enforce, a legitimate expectation that it would appraise his case by reference to them notwithstanding that they failed to reflect the ordinary law.”
These two judges therefore believe that if HMRC have made a clear and unambiguous statement on a matter, then you should be able to rely on it.
What does this mean?
If you are relying on something on a website, that is your right. If the guidance has changed, though, this might prove difficult so we recommend you take dated screenshots or keep printed copies of any advice you are relying on. That should prove, beyond doubt, what the guidance was at the time you relied on it.
If you want to refer to information provided by ‘phone, provided that you gave the officer full and frank information, then you should be able to rely on this – but you may have to provide evidence that the call took place. Many phone calls are recorded now, so it makes sense to note the date and time of the call and take the name of the person you discussed the matter with.
HMRC still refuse to let me rely on their guidance. What can I do?
Your first port of call should be to make a complaint in writing setting out the facts of the case. Our website provides you with details of how to do this. If you still cannot receive satisfaction, you can ask for the case to be considered by the Adjudicator. If your complaint is turned down at that level, there is the option of Judicial Review, but the bar for a successful application is very high, the process takes time and can be prohibitively expensive.
Contact: Gillian Wrigley (please use form at http://www.litrg.org.uk/contact-us) or follow us on Twitter: @LITRGNews