No set off permitted

The taxpayer filed his personal tax return for 2007/08 in October 2008. HMRC subsequently issued a tax calculation of around £200 000.

In January 2009 the taxpayer’s accountant amended the return to include a claim for employment loss relief under ITA 2007 s 128.

The loss related to the year 2008/09. HMRC notified the taxpayer that they intended to open an enquiry into the loss relief claim.

The taxpayer wanted to offset the loss relief against the tax assessed. HMRC said the whole amount of the tax was due and commenced proceedings in the county court against the taxpayer.

The High Court ruled that HMRC were correct to say the taxpayer’s claim for loss relief relating to 2008/09 could not be included in his return for 2007/08.

Each year of...