A conclusion in a statutory review letter did not give the company a legitimate expectation that there would be no HMRC enquiry into the company’s tax return for the relevant tax year.
Following an enquiry into the company's 2010/11 tax return, HM Revenue and Customs (HMRC) issued a discovery assessment for 2011/12, despite being within the time limit for opening an enquiry into the 2011/12 tax return. The company appealed.
Following a statutory review, HMRC wrote to the company, stating its conclusion that the 2011/12 assessment should be reduced to nil, as there was insufficient evidence to support the amount assessed. The letter stated that the matter would be treated as settled by agreement under TMA 1970, s 54(1) within 30 days, in the absence of an appeal to the tribunal or further action being taken by the company.
A week later, HMRC opened an enquiry into the company's 2011/12 tax
