Appeal rejected

The two taxpayers were members of their employer’s company share scheme. HMRC opened enquiries into their self assessment returns suggesting capital gains declared by each in relation to disposals of shares from the scheme were instead liable to income tax.

The taxpayers agreed to settle the matter and sent cheques to cover the tax due but they disputed the interest charged and appealed to the First-tier Tribunal.

The taxman asked for the appeals to be struck out because they had been settled by agreement under TMA 1970 s 54.

The taxpayers claimed no valid agreement had been made with the Revenue and they were not aware of an offer from the department. They claimed they had been under duress to make payment and had been given incorrect information about the costs of appealing to the tribunal.

The First-tier Tribunal found the taxpayers had entered a section...