Background
The appellant was in the ‘transitional regime’ applicable to barristers moving from the cash basis to the ‘true and fair’ basis of recognising profits (under FA 1998, s 42) for the tax years 2005/06, 2006/07 and 2007/08.
Following a tax return enquiry by HM Revenue and Customs (HMRC), revised returns were submitted for the tax years 2005/06 to 2008/09. The correct application of the true and fair basis resulted in profits being decreased for 2006/07 and increased for 2005/06 and 2007/08.
The appellant’s overpayment relief claim for 2006/07 was rejected by HMRC as being out of time. Furthermore, HMRC raised discovery assessments for 2005/06 and 2007/08, on the basis that the appellant had been ‘careless’, and without taking account of the overpayment claim. The appellant appealed.
The primary issue was whether the
