Claims to carry back losses

The taxpayers had participated in arrangements directly or through partnerships mainly involving investments in films. They made claims to carry back losses arising in one year of assessment and set these against income of one or more previous years. HMRC refused the claims.

The taxpayers said the only way HMRC could enquire into their claims was by a notice of enquiry under TMA 1970 Sch 1A para 5(1)(a). It had not opened such enquiries before the time limit expired so it was too late.

HMRC referred to the Supreme Court’s decision in De Silva v CRC [2017] STC 2483. In that case the court had held that TMA 1970 s 9A gave HMRC the power to enquire into a taxpayer’s carry-back claims (or under s 12AC into partnership returns). Further HMRC did not have to start an enquiry under Sch 1A to challenge a claim.

Lord...