Extra-statutory concession – the “Sheldon Statement” applicable to 31 March 2009
The effective removal of estoppel as a legal remedy in appeal proceedings1 leaves taxpayers in a difficult position. HMRC's policy in such situations was, prior to 1 April 2009, set out in the following parliamentary answer. Mr Robert Sheldon said—
“Where it is established that an officer of Customs and Excise, with the full facts before him, has given a clear and unequivocal ruling on VAT2 in writing, or it is established that an officer knowing the full facts has misled a trader to his detriment, the Commissioners of Customs and Excise would only raise an assessment based on the correct ruling from the date the error was brought to the attention of the registered person concerned3.”
It was subsequently confirmed that the statement referred to both written and oral rulings, including those given by telephone, fax and e-mail4.
It is arguable that a person who understates his tax liabilities as a result of incorrect advice gains some benefit rather than suffering some detriment. However, a tribunal has held that this is not so where a person has not made provision for the tax for which he is subsequently assessed5.
An officer's conduct fell within the second limb of the “Sheldon” statement even if he failed to appreciate the significance of the facts given him, or misunderstood them. The reference to raising an assessment includes disallowing a claim for input tax credit or a repayment of input tax6. An officer who