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04 January 2007 / Glyn Maddocks
Issue: 7254 / Categories: Features , Tax
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The tax man can do no wrong

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No matter how strong a negligence and maladministration claim against HMRC, it will almost certainly fail as a matter of principle. Glyn Maddocks explains

A recent ruling in the Chancery Division has far reaching implications for tax payers. Andrew Simmonds QC, sitting as deputy judge, held that although HM Revenue & Customs (HMRC) was in breach of the Income and Corporation Taxes Act 1988 (ICTA 1988) this did not give rise to a cause of action for damages; nor did HMRC owe a common law duty of care to tax payers.

Background

Neil Martin is a small-time building subcontractor based in Cumbria. In early 1999, he formed a company Neil Martin Ltd, with the intention of transferring his sole trader business to that company.

In the construction industry subcontractors are subject to a statutory tax deduction scheme. A new scheme was due to start on 1 August 1999. Both the old and new schemes are governed by ICTA 1988, Pt XIII, Ch IV, ss 559 to 567. A subcontractor must

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