Tax liability declaration was an abuse of process

The taxpayer asked for a declaration under the Civil Procedure Rules 1998 (CPR) Part 8 from the High Court that he had no liabilities for the 2000-01 other than those shown in his self-assessment returns.

The purpose of his claim was to prevent HMRC recovering a significant portion of a repayment made to him in 2001 which had arisen in respect of the partnership losses.

HMRC had enquired into the partnership return and issued closure notices in 2003. The partnership’s appeal was settled by agreement in 2011 and most of the losses disallowed. As a result the taxpayer’s share of those losses was significantly reduced. The department said it had issued the taxpayer a notice under TMA 1970 s 28B(4) which crystallised the tax liability it wished to enforce. There was no right of appeal against this notice.

The High Court rejected the...