Tinkler v Revenue and Customs

LORD BURROWS: (with whom Lord Hodge, Lady Arden and Lady Rose agree)

1.         Introduction

1.                  Estoppel by convention is notoriously difficult to pin down. It can arise in various contexts. Most commonly, it arises in relation to a contract between the parties. In that context, estoppel by convention may, for example, affect the obligations of the parties or be relevant to the interpretation of the contract. However, this case is concerned with estoppel by convention in relation to non-contractual dealings.

2.                  As in the highly influential case of Revenue and Customs Comrs v Benchdollar Ltd [2009] EWHC 1310 (Ch); [2010] 1 All ER 174 (“Benchdollar”), the non-contractual context with which we are concerned is dealings between HMRC and a taxpayer. In Benchdollar Briggs J held that estoppel by convention had been established by HMRC so as to prevent the employer taxpayers from relying on the expiry of a statutory limitation period, in relation to some, although not all, of HMRC’s claims. In this case the focus is on estoppel by convention in relation to an enquiry under section 9A of the Taxes Management Act 1970 (“TMA”) by HMRC, who are the appellants, into a tax return of Mr Tinkler, who is the respondent. There are also elements of the law of agency to consider, in relation to the estoppel by convention, because Mr Tinkler engaged tax accountants and advisers, BDO Stoy Hayward (“BDO”), to deal with his tax affairs.

3.                  The issues raised before the First-tier Tribunal (“FTT”), Upper Tribunal (“UT”), and the Court of Appeal ranged over a wider compass than estoppel by convention. But HMRC’s only ground of appeal to this court is from the Court of Appeal’s decision that Mr Tinkler was not estopped, under estoppel by convention, from denying that a valid enquiry under section 9A TMA had been opened. This judgment first examines the relevant statutory provisions, the facts, and the reasoning of the courts below, before turning to analyse in detail, and to apply, the law on estoppel by convention with particular reference to Benchdollar.

4.                  In formulating this judgment, I have been greatly assisted by the work of commentators. These have included Elizabeth Cooke, The Modern Law of Estoppel (2000) especially pp 31-32; Spencer Bower: Reliance-Based Estoppel: The Law of Reliance-Based Estoppel and Related Doctrines, 5th ed (2017), (edited by Piers Feltham, Tom Leech QC, Peter Crampin QC, Joshua Winfield) especially chapter 8; Michael Barnes QC, The Law of Estoppel (2020) especially chapter 5; Chitty on Contracts, 33rd ed (2018), paras 4-108 to 4-115; Snell’s Equity, 34th ed (2020), paras 12-011 to 12-016; Rory Derham, “Estoppel by Convention - Part I” (1997) 71 ALJ 860 and “Estoppel by Convention - Part II” (1997) 71 ALJ 976.

2.         The relevant statutory framework

5.                  Section 9A TMA relevantly provides:

“9A.…