Valid notices

Did the taxpayer make a valid claim for losses in its tax returns?

The taxpayer claimed terminal loss relief for its accounting periods ended 31 July 2004 and 2005. HMRC raised enquiries into the returns for 2004 and 2005 and issued closure notices disallowing the claim. The taxpayer said the notices had not stated “in clear and unambiguous terms” that relief was being disallowed. Rather they were void because terminal loss relief had not been claimed in the returns.

The First-tier Tribunal noted that although in both returns the section to be completed for trading losses had been left blank the taxpayer declared losses in box 122 of each form. It included computations financial documents supplied by the company and a letter setting out how the terminal loss had been calculated. As a result the tribunal said the returns included loss claims.

The...