© 2026 by Michael Firth KC, Gray's Inn Tax Chambers
Contact: michael.firth@taxbar.com
Procedure.Tax
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N11a. Estoppel by convention
Jurisdiction​
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- Estoppel by convention can in principle operate against HMRC, but more limited
"[25] Estoppel by convention can in principle operate against HMRC. The leading authorities, such as Tinkler and Benchdollar, concern whether estoppel by convention operated on the facts against the taxpayer[2]. Nevertheless, Mr Pritchard did not seek to argue that HMRC were exempt from the doctrine of estoppel by convention, and we consider that he was right not to do so.
[26] However, the circumstances in which estoppel by convention will operate against HMRC will be limited. As Chitty on Contracts puts it, "equitable estoppel may be successfully invoked against the Crown and public authorities, but not to the same extent as it is available against private parties":14-053." (MWL International Ltd v. HMRC [2026] UKUT 62 (TCC), Adam Johnson J and Judge Thomas Scott)
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- If statute imposes a positive duty on grounds of public policy, no estoppel by convention
"[40] We agree with Mr Gordon that there is no absolute rule that estoppel cannot "defeat a statute". However, we do not accept his formulation of the circumstances in which estoppel by convention will operate. We consider that the following principles can be drawn from the authorities:
(1) The starting point is to identify and consider the terms of the legislation against which estoppel by convention is sought. That was emphasised in all of the authorities discussed above.
(2) If the statutory provision imposes a positive duty "enacted for the benefit of a section of the public, that is, on grounds of public policy in a general sense", then estoppel by convention cannot operate to prevent the performance of that duty: Maritime Electric. While such a duty might commonly be found in areas such as planning legislation, we consider that this description should not be applied unduly narrowly. As is observed in Chitty on Contracts[3], "it is difficult to see what kinds of statutory duties would fail to satisfy this test, but their Lordships perhaps had in mind duties imposed under a private Act of Parliament". In relation to tax legislation, any requirement for a policy of public benefit is likely to be satisfied." (MWL International Ltd v. HMRC [2026] UKUT 62 (TCC), Adam Johnson J and Judge Thomas Scott)
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- Estoppel cannot be invoked to achieve what contract could not
"[40] ... (3) To the extent that it would not be possible for the relevant body (in this case HMRC) to avoid or abrogate the relevant statutory provisions by contract, then estoppel cannot be invoked to achieve what contract could not: Tinkler, Southend-on-Sea and Keen v Holland." (MWL International Ltd v. HMRC [2026] UKUT 62 (TCC), Adam Johnson J and Judge Thomas Scott)
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- Determine whether the statutory provisions are being "overridden"?
"[40] ... (4) It is necessary to determine on the facts and by reference to the statutory provisions against which estoppel is sought whether those provisions would be "overridden" (Keen v Holland) or "undermined" (Tinkler) by the estoppel: Keen v Holland and Tinkler. If they would, estoppel will not be available." (MWL International Ltd v. HMRC [2026] UKUT 62 (TCC), Adam Johnson J and Judge Thomas Scott)
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- Same principles apply where statutory provision confers a power or discretion
"[40] ... (5) These principles apply not only where the statutory provision in question imposes a duty but also where it confers a power or discretion: Southend-on-Sea. In Laker Airways, Lord Denning described the underlying principle in the following terms:
…The underlying principle is that the Crown cannot be estopped from exercising its powers, whether given in a statute or by common law, when it is doing so in the proper exercise of its duty to act for the public good, even though this may work some injustice or unfairness to a private individual - see [Maritime Electric]…"
...
[49] It does not affect this conclusion that section 8 ToFA (whether or not read with the general collection and management powers conferred on HMRC) refers to a decision by an officer of the Board. As we have explained, the policy behind excluding estoppel in this situation would apply whether or not the relevant statutory provisions were characterised as duties or discretionary powers. In any event, we would agree with the FTT (at [131] of the Decision) that section 8 does not require or confer a discretion on an officer. Rather, it envisages a decision that a person is liable to pay NICs. In relation to the Cars such a decision did not involve an exercise of discretion, since liability arose unless the terms of the exemption in section 167 were met. We discuss this area further below in relation to legitimate expectation." (MWL International Ltd v. HMRC [2026] UKUT 62 (TCC), Adam Johnson J and Judge Thomas Scott)
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- Not contrary to the purpose of TMA s.9A
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"[81] The situation with which we are concerned is distinguishable. Section 9A TMA requires that a notice of enquiry is given to the taxpayer; and section 115(2) provides one method by which that notice may be given. But it would have been open to the parties (ie HMRC and Mr Tinkler) to agree expressly the method by which the notice of enquiry was to be given (including, it would seem, that a notice of enquiry given to Mr Tinkler’s tax advisers would have counted). It follows from the TMA being permissive as to the method of giving notice that an estoppel by convention, by which HMRC and Mr Tinkler/BDO operated on the basis that a valid enquiry had been opened (ie that a particular method had been used), does not undermine the purpose of the Act. As, applying the principles of estoppel by convention, Mr Tinkler is otherwise estopped from denying that HMRC opened a valid enquiry, there is nothing in the statutory provisions, purposively interpreted, that requires the court to reject that estoppel.
[82] There is an additional reason, on the facts, supporting that conclusion. We have seen, at para 15 above, that the FTT found that Mr Tinkler and/or his PA knew of HMRC’s enquiry in November 2005. Even if, contrary to the view taken in the last paragraph, the purpose of section 9A would otherwise be undermined by the operation of the estoppel by convention, there cannot be any conceivable undermining of the statutory purpose once the taxpayer actually knows of the enquiry. After November 2005, therefore, there has been no conceivable statutory reason why the taxpayer should be protected by rejecting the operation of estoppel by convention." (HMRC v. Tinkler [2021] UKSC 39)
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"[38] Lord Burrows then distinguished Keen v Holland, on the basis that section 9A was permissive as to the method of giving notice to a taxpayer, so that estoppel by convention would not "undermine the purpose of the Act": [81]." (MWL International Ltd v. HMRC [2026] UKUT 62 (TCC), Adam Johnson J and Judge Thomas Scott)
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- No estoppel to prevent HMRC applying the clear terms of the NICs legislation in the face of an inconsistent agreement
"[46] We consider that the requirement to own another car cannot fairly be described as an adequate means of reflecting the statutory requirement that any private use be merely incidental, or as a methodology for enforcing that requirement. Section 167(3)(d) is requiring in unequivocal terms that any actual usage of the car must be no more than incidental. Under the provisions of the 1993 Agreement, it would be perfectly possible for an employee to own another car but not use it at all, and/or to use the "pooled" car exclusively for private purposes. The 1993 Agreement contained no requirement as to actual usage at all[4]. An estoppel on the basis of such an agreement would prevent HMRC from applying the clear terms of the statute.
[47] HMRC could not have bound themselves by contract to fail properly to apply the terms of section 167 in this way in exempting the Cars from NICs. It follows that they could not be estopped from applying those plain statutory terms, as they did in the disputed decisions applying NICs.
[48] By the same token, the effect of enforcing the estoppel would also be to override and undermine the statutory private use requirement in section 167(3)(d)." (MWL International Ltd v. HMRC [2026] UKUT 62 (TCC), Adam Johnson J and Judge Thomas Scott)
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- FTT seeing no reason why it did not have jurisdiction to consider T's reliance on estoppel
"[224] In this case, HMRC did not make any submissions to the effect that the Tribunal did not have jurisdiction to consider arguments based on estoppel by convention. We have not therefore considered this point in any detail although record that, bearing in mind the statutory framework which we have already discussed in the context of legitimate expectation, we do not see any obvious reason why the Tribunal would not have jurisdiction to consider arguments based on estoppel by convention in the context of an appeal against a recovery assessment, particularly given that this does not fall into the category of public law arguments." (Queenscourt Limited v. HMRC [2024] UKFTT 460 (TC), Judge Vos)
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- FTT deciding that HMRC cannot be bound by estoppel
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[126] [HMRC] submitted that even if the Tinkler conditions were met, HMRC could not be estopped from applying ITEPA s 167, because it was a statutory provision enacted by Parliament. Although she did not refer to Halsbury's Laws, we noted that this similarly says:
"the principle that a party cannot set up an estoppel in the face of a statute has been described as a principle that appears in our law in many forms."
[127] [HMRC relied on Keen v Holland [1984] 1 All ER 75. In that case, Mr Keen had submitted that Mr Holland was estopped from relying on s 2(1) of the Agricultural Holdings Act 1948, because he had signed contracts excluding the protection given by that subsection. Oliver LJ, giving the judgment of the Court, said at p 261 that this argument was "not, in our judgment, sound" because:
"The terms of section 2(1) are mandatory once the factual situation therein described exists, as it does here, and it cannot, as we think, be overridden by an estoppel even assuming that otherwise the conditions for an estoppel exist."
...
[124]We therefore agree with [HMRC] that HMRC cannot be estopped from applying a statutory provision, whether or not they have a discretion as to its application, and despite the Tinkler conditions having been met." (MWL International Ltd v. HMRC [2024] UKFTT 402 (TC), Judge Redston)
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"​[15] [HMRC] contended that it was necessary to apply the dicta of Finlay J in Williams v Grundy's Trustees, KB 1933, 18 TC 271, “nothing is better settled than the principle that there is no estoppel as against the Crown”.
A blunder cannot prevent HMRC from collecting tax. The mistake was unfortunate but cannot prevent HMRC collecting the tax which is chargeable and due to be collected.
...
[23] The principle of no estoppel against the Crown operated to override the mistake by HMRC." (Frost v. HMRC [2010] UKFTT 344 (TC), Judge Radford)
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Ingredients of estoppel (summary)
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"[53] As I have already said, both counsel submitted that the Benchdollar principles, subject to the Blindley Heath amendment to the first principle, applied in this case. I agree. This judgment therefore affirms that those principles, as amended by Blindley Heath, are a correct statement of the law on estoppel by convention in the context of non-contractual dealings. What I have also sought to do is to explain the ideas underpinning the first three principles which may provide assistance in the understanding and application of those principles." (HMRC v. Tinkler [2021] UKSC 39 - see the summary in the Court of Appeal, below)
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"[53] As summarised in Chitty on Contracts (32nd edition) at 4-108:
"Estoppel by convention may arise where both parties to a transaction "act on assumed state of facts or law, the assumption being either shared by both or made by one and acquiesced in by the other." The parties are then precluded from denying the truth of that assumption, if it would be unjust or unconscionable (typically because the party claiming the benefit has been "materially influenced" by the common assumption) to allow them (or one of them) to go back on it."
[54] The parties were agreed that the principles governing estoppel by convention arising out of non-contractual dealings are conveniently summarised in the judgment of Briggs J in HMRC v Benchdollar Limited and Ors [2009] EWHC 1310 (Ch), [2010] 1 All ER 174 at [52]. This summary was approved by the Court of Appeal in Blindley Heath Investments Ltd & Anor v Bass [2015] EWCA Civ 1023, [2017] Ch 389 at [91], subject to one qualification explained at [92]. If that qualification is made to the first paragraph of the summary, the amended summary is as follows:
(1) It is not enough that the common assumption upon which the estoppel is based is merely understood by the parties in the same way. The assumption must be shown to have crossed the line in a manner sufficient to manifest an assent to the assumption.
(2) The expression of the common assumption by the party alleged to be estopped must be such that he may properly be said to have assumed some element of responsibility for it, in the sense of conveying to the other party an understanding that he expected the other party to rely on it.
(3) The person alleging the estoppel must in fact have relied upon the common assumption, to a sufficient extent, rather than merely upon his own independent view of the matter.
(4) That reliance must have occurred in connection with some subsequent mutual dealing between the parties.
(5) Some detriment must thereby have been suffered by the person alleging the estoppel, or benefit thereby have been conferred upon the person alleged to be estopped, sufficient to make it unjust or unconscionable for the latter to assert the true legal (or factual) position." (Tinkler v. HMRC [2019] EWCA Civ 1392, §§53 - 54, Hamblen LJ)
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"[222] The relevant principles can be summarised as follows:
(1) There must be an expressly shared common assumption between the parties.
(2) The sharing of the common assumption must include words or conduct from which the necessary sharing or assent to the assumption can properly be inferred.
(3) The expression of the common assumption by the party alleged to be estopped (in this case HMRC) must be such that they may properly be said to have assumed some element of responsibility for it, in the sense of conveying to the other party an understanding that they expect the other party to rely on it.
(4) The person alleging the estoppel (Queenscourt) must in fact have relied upon the common assumption, to a sufficient extent, rather than relying upon their own independent view of the matter.
(5) That reliance must have occurred in connection with some subsequent mutual dealing between the parties.
(6) Some detriment must thereby have been suffered by the person alleging the estoppel (Queenscourt) or some benefit must thereby have been conferred upon the person alleged to be estopped sufficient to make it unjust or unconscionable for the latter to assert the true legal (or factual) position." (Queenscourt Limited v. HMRC [2024] UKFTT 460 (TC), Judge Vos)
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- Should be raised in advance of FTT hearing
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"[56] The argument that there was an estoppel by convention was not raised in advance of the FTT hearing. The argument formed no part of HMRC's case to the FTT nor of their Skeleton Argument, it being raised for the first time in counsel's closing submissions. HMRC failed to call any officer who had been involved either in the sending of the original letter or in subsequent conversations with BDO. Instead, HMRC sought to rely on the documents before the FTT and the cross-examination of Mr Tinkler. This is unsatisfactory. It is always important that the precise nature of an alleged estoppel and of the factual circumstances giving rise to it are clearly articulated. It is also generally desirable that the parties should have a proper advance opportunity to consider any such case and the need for evidence." (Tinkler v. HMRC [2019] EWCA Civ 1392, §56, Hamblen LJ)
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- Burden of proof on party asserting estoppel
"[18] ... As regards estoppel by convention, the burden of proof is upon HMRC as it is HMRC who raises it and relies upon it. The standard of proof in all these respects is of course that of the balance of probabilities." (Cattrell v. HMRC [2024] UKFTT 67 (TC), Judge Chapman KC)
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Shared assumption that it would be unconscionable to go back on​
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(1) C must know the D shares the common assumption, and D must objectively expect C to rely on it
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"[51] It may be helpful if I explain in my own words the important ideas that lie behind the first three principles of Benchdollar. Those ideas are as follows. The person raising the estoppel (who I shall refer to as “C”) must know that the person against whom the estoppel is raised (who I shall refer to as “D”) shares the common assumption and must be strengthened, or influenced, in its reliance on that common assumption by that knowledge; and D must (objectively) intend, or expect, that that will be the effect on C of its conduct crossing the line so that one can say that D has assumed some element of responsibility for C’s reliance on the common assumption." (HMRC v. Tinkler [2021] UKSC 39)
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[115] We agree with [the taxpayer], and find as a fact that the Inspector knew the Cars would be used for some private journeys. We make that finding for the following reasons:
(1) Mr Walpole told the Inspector that the Cars were regarded as "travelling offices", because they contained phone equipment. It would have been an obvious and inescapable inference that the Cars were regularly used for all types of journey, including those with a private purpose, because otherwise there was a high risk that calls from customers would be missed.
(2) One of the requirements agreed at the Meeting was that employees who used the Cars each had access to a personal car owned privately. That requirement only makes sense if it was a proxy for the statutory condition that "any private use of the car made by the employee was merely incidental to the employee's other use of the car". The Inspector therefore accepted the Cars would be used for all types of journey, although as the directors had personal cars owned privately, the number of journeys with a private purpose could be expected to be lower than if this was not the position.
[116] We therefore find that there was a common assumption that the Cars were pool cars provided the Appellants kept to the terms agreed in the Meeting. We also agree that the Inspector, acting on behalf of the Inland Revenue, assumed responsibility for that assumption, knowing it would be relied on, and that the Appellants did rely on it. It follows that the requirement in Tinkler that the Inspector's conduct must have "crossed the line" (see §111) has also been met." (MWL International Ltd v. HMRC [2024] UKFTT 402 (TC), Judge Redston)
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- Something must have crossed the line sufficient to manifest assent to the assumption
"[21] The expansion provided by Lord Burrows was that in relation to the "common assumption" described in the first of these principles, "something must be shown to have 'crossed the line' sufficient to manifest an assent to the assumption.": Tinkler at [50]." (MWL International Ltd v. HMRC [2026] UKUT 62 (TCC), Adam Johnson J and Judge Thomas Scott)
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- No estoppel if no assent to HMRC's assumption
"[49] However, Tinkler was a factually different situation as the taxpayer (through his advisor) was actively engaged in responding to the enquiry during the time when a notice of enquiry could have been given. In the present case, however, Mr Cattrell (through PWC) was involved in agreeing to the RSA in 2005 and there was then no contact until October 2013 at the earliest.
[50] I find that there was a shared assumption that a notice of enquiry had been given. HMRC were clearly of the view that a notice had been given, as shown from its records and internal memoranda. For the reasons set out above, I find that Mr Cattrell had received the notice of enquiry and so, contrary to Mr Lynam's submissions, did understand that a notice of enquiry had been given (although there is nothing to say that Mr Cattrell understood the legal ramifications of this). However, this shared common assumption did not cross the line. Crucially, the RSA was predicated on the need to issue a notice of enquiry if one had not already been issued. Crucially, paragraph (i) of the RSA provided that, "HMRC will open enquiries into all other individuals within the RSA but will not request information and documentation relating to the GS loss claims." Similarly, paragraph (c) provided that, "The RSA does not affect the statutory rights and obligations of either the individual or HMRC." The RSA did not, therefore, manifest an assent to any assumption that a notice of enquiry had already been given, as the RSA itself catered for the possibility that it had not been given. Although there was no such reservation in the communications in 2013 and 2014 (which did appear to assume that the enquiry was valid) these are after the date upon which a notice of enquiry could have been given under section 9A of the TMA 1970 and so any reliance upon that would not be detrimental reliance as HMRC were by then already out of time.
[51] It follows that the RSA did not constitute an assumption of responsibility either, as the RSA did not provide for or otherwise indicate that Mr Cattrell accepted that a notice of enquiry had been given. I accept that he was, through PWC as his agent, indicating (and, indeed, agreeing) that he would participate in the RSA. However, for the reasons set out above, the RSA still on its face envisaged a need to give a notice of enquiry where one had not been given." (Cattrell v. HMRC [2024] UKFTT 67 (TC), Judge Chapman KC)
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- No bar to estoppel that the relying party initiated the mistake or was negligent
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"[56] However, with respect to the Court of Appeal, I do not think anything significant turns on that misrepresentation in this case. In particular, as we have seen by reference to Amalgamated Investment, The Amazonia and Benchdollar, it is not a bar to estoppel that HMRC initiated the mistake or that, as in Benchdollar, HMRC was careless in relation to that mistake or induced the other party’s mistake by a misrepresentation. The Court of Appeal regarded those factors as highly relevant to its decision not least in deciding on the unconscionability aspect of estoppel by convention. With respect, this gave those factors far too much weight. On these facts, it was largely irrelevant that HMRC may be said to have initiated the common mistake by a misrepresentation and to have been careless in doing so." (HMRC v. Tinkler [2021] UKSC 39)
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But cannot use estoppel by convention to defeat claim for misrepresentation
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"[67] Before moving on to those two additional issues, there is one clarificatory point about the general relationship between misrepresentation and the unconscionability element of estoppel by convention. This particular point does not arise on the facts of this case but it is relevant in thinking more generally about estoppel by convention. I have made clear that, on the facts of this case, and in line with Benchdollar, HMRC’s misrepresentation is no bar to its invocation of estoppel by convention. But one can postulate facts where the invocation of estoppel by convention might be used to try to undermine a claim based on the misrepresentation. Say, for example, A makes a negligent misrepresentation to B that a particular fact (X) is true. X is untrue. B suffers loss by relying on A’s negligent misrepresentation. When B finds out the truth, B brings a claim against A for damages for the tort of negligent misstatement. Estoppel by convention is raised by A as a defence to that claim applying the argument that A and B shared a common assumption that X is true, which was relied on by A, so that B is estopped from denying that X is true; and if X cannot be said to be untrue, B cannot establish the alleged misrepresentation by A. This hypothetical example serves to illustrate that one needs an explanation as to why estoppel by convention does not undermine claims for misrepresentation.
[68] The best explanation is that, where estoppel by convention would serve to undermine the cause of action for misrepresentation, it would not be unconscionable for the misrepresentee (B in the above example) to be able to deny estoppel by convention even if A has detrimentally relied on B’s affirmation of the common assumption. The fifth principle in Benchdollar could not therefore be satisfied by A. But, of course, this is not a problem on the facts of this case because estoppel by convention is not here being invoked by HMRC to defeat a cause of action by Mr Tinkler for misrepresentation. Indeed, no such claim against HMRC could possibly succeed because Mr Tinkler has suffered no loss consequent on HMRC’s negligent misrepresentation." (HMRC v. Tinkler [2021] UKSC 39)
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- Actions and beliefs of agent attributable to principal
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"[26] By filling in and returning Form 64-8, Mr Tinkler was making clear to HMRC that BDO had general authority to deal with HMRC in relation to his tax affairs including dealing with questions arising under an enquiry. That apparent conferral of authority was very wide indeed. As we have seen in para 7, it stated that BDO was authorised to act on behalf of the taxpayer in connection with “any matters within the responsibility of [HMRC]”. There was a limited carve out from that conferral of apparent authority in relation to being given an enquiry notice. But in all other respects, including making clear to HMRC that Mr Tinkler was assuming that a valid enquiry had been opened, BDO had Mr Tinkler’s apparent authority to act on his behalf. Put in shorthand, BDO had the apparent authority of Mr Tinkler for the estoppel-raising conduct alleged.
[27]...The FTT went on to find that, although not necessary to do so (because apparent authority was enough), BDO had Mr Tinkler’s express instructions, and hence actual authority, to write the letter to HMRC of November 2005. And at para 145, it concluded that, for the purpose of estoppel by convention, “the actions and beliefs of BDO are properly attributed to Mr Tinkler.” I agree." (HMRC v. Tinkler [2021] UKSC 39)
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(2) Detrimental reliance
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- Detrimental reliance by not taking steps to correct mistake
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"Turning to the fifth and final principle in Benchdollar, it is not in dispute that HMRC’s reliance was detrimental because, by reason of HMRC acting on the affirmed common assumption that a valid enquiry had been opened, it did not send another notice of enquiry to Mr Tinkler before the expiry of the 12 months’ time limit on opening an enquiry into the 2003/04 Return. And if the enquiry were treated as invalid, the 30 August 2012 closure notice - by which HMRC were able to deny BDO’s tax claim of over £635,000 (see para 13 above) - would also have to be treated as invalid. Correspondingly, Mr Tinkler would stand to gain some £635,000 if estoppel by convention could not here be established by HMRC." (HMRC v. Tinkler [2021] UKSC 39)
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- Replying and conducting oneself on the basis that the mistaken assumption is correct can be sufficient
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"[59] One of my essential disagreements with the Court of Appeal’s approach to the facts may be expressed by saying that this was not a case where BDO was simply repeating back to HMRC the mistake/misrepresentation (that the notice had been validly served). BDO’s conduct went further than that. Indeed, in addition to the positive conduct of BDO referred to in the previous two paragraphs, there is the point that BDO had wide apparent authority to deal with HMRC on behalf of Mr Tinkler. Had there been a problem with the enquiry notice, HMRC would reasonably have expected BDO to raise that problem. Far from doing that, BDO conducted itself, with Mr Tinkler’s apparent authority, on the basis that there was a valid enquiry underway. By so doing, BDO affirmed HMRC’s mistaken assumption.
...
[61] The important points, in relation to the first three of the principles in Benchdollar, are that both parties shared a mistaken common assumption; that BDO had made manifest to HMRC that it was sharing, and acting on, that common assumption (eg BDO’s conduct on 6 July 2005 and clearly again on 24 November 2005 had “crossed the line”); and that HMRC was thereafter relying, as BDO must have expected and intended, on the affirmation of the common assumption in relation to its subsequent mutual dealing with BDO. As BDO must have intended or expected, BDO’s affirmation of, or subscription to, the common assumption strengthened, or influenced, HMRC in thereafter relying on the common assumption. Using the words of the second principle in Benchdollar, BDO had “assumed some element of responsibility” for the common assumption and for HMRC’s reliance on it." (HMRC v. Tinkler [2021] UKSC 39)
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- Not having opportunity to mitigate effect of retrospective decision
"[122] We agree, and find that the retrospective nature of the decisions meant that the Appellants were unable to take steps to mitigate their position, so as to reduce or eliminate the NIC charges, and they therefore suffered detriment." (MWL International Ltd v. HMRC [2024] UKFTT 402 (TC), Judge Redston)
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(3) Detrimental reliance must be in the course of subsequent mutual dealings
"[227] The problem faced by Queenscourt, however, is the requirement that the reliance must have occurred "in connection with some subsequent mutual dealings between the parties" and that some detriment must "thereby" have been suffered by Queenscourt.
[228] As we have said, the reliance identified by Ms Brown is the giving of the second error correction notice seeking a further repayment of VAT. However, the detriment which she relies on is the impact on the Group's business which we have already described in our discussion of the legitimate expectation arguments."
(Queenscourt Limited v. HMRC [2024] UKFTT 460 (TC), Judge Vos)
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- HMRC enquiry is mutual dealings
​"[62] In my view, there is also no difficulty at all in HMRC satisfying the fourth principle in Benchdollar that requires the reliance to be “in connection with some subsequent mutual dealing between the parties”. HMRC’s reliance on the common assumption that a valid enquiry notice had been served was in connection with carrying out the enquiry, which included mutual dealings such as questions being asked by HMRC about the Ukrainian properties which were answered by BDO, and HMRC, in the light of those answers, issuing a closure notice. I examine later, albeit to reject, Mr Thomas’ submission that a particular narrow meaning must be given to “mutual dealings”.
...
[77] ... It is sufficient for our purposes to make clear that the scope of estoppel by convention extends to the mutual dealings about tax between HMRC and the taxpayer that were in play in this case." (HMRC v. Tinkler [2021] UKSC 39)
- Submitting tax returns and numerous enquiries is mutual dealings
"[118] We have already found as facts that the Appellants submitted their payroll returns on a on the basis of their understanding of the common assumption agreed at the Meeting, and that there had been "numerous tax enquiries" into the Appellants. That is sufficient to meet the requirement that subsequent mutual dealing took place between HMRC and the Appellants." (MWL International Ltd v. HMRC [2024] UKFTT 402 (TC), Judge Redston)
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- Unconscionability unlikely to have additional role if 5 principles met
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"[64] What about unconscionability? This was mentioned as part of the fifth of Briggs J’s principles in Benchdollar; and in other leaner formulations - such as that of Lord Steyn in The Indian Endurance - it has been put forward as playing an even more central role. In most cases, in line with Briggs J’s statement of principles, unconscionability is unlikely to add anything once the other elements of estoppel by convention have been established and, in particular, where it has been established that the estoppel raiser has detrimentally relied on the common assumption. However, one can certainly envisage exceptional cases where unconscionability may have a useful additional role to play. For example, even if all the other elements of estoppel by convention can be made out, fraudulent conduct by the estoppel raiser would rule out estoppel by convention (see, by analogy, D and C Builders Ltd v Rees [1966] 2 QB 617 in which duress by the promisee in inducing the promise ruled out promissory estoppel). But such examples are likely to be rare. Even though HMRC was primarily at fault on the facts of this case - by carelessly sending the notice of enquiry to the wrong address and its consequent misrepresentation to BDO - I agree with the approach in Amalgamated Investment, The Amazonia and Benchdollar so that that does not amount to unconscionable conduct barring the establishment of estoppel by convention.
[65] Although unnecessary to my decision, I am reinforced in my view that unconscionability here supports the application of estoppel by convention by the findings of the FTT regarding Mr Tinkler’s knowledge. As we have seen at para 15 above, the FTT found that Mr Tinkler and/or his PA knew of HMRC’s enquiry in November 2005. At that time, Mr Tinkler could have informed HMRC that no notice of enquiry had been received by him. That would have left HMRC with sufficient time, within the 12-month deadline, to issue a replacement notice of enquiry. But Mr Tinkler and/or his PA did not do that. In those circumstances, it may be thought particularly unconscionable for him to raise this point for the first time over nine years later." (HMRC v. Tinkler [2021] UKSC 39)​
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Examples
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- Taxpayer estopped from denying validity of VAT option to tax land
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"[75] Mr Simpson submitted that the principle of estoppel by convention was plainly engaged, because all the requirements in the list set out by Briggs J were satisfied:
(1) From 6 March 2008, when Officer Bounds wrote to HMRC acknowledging that the Jubilee Centre was opted to tax, until Mr Ali’s letter of 12 November 2018, both parties had proceeded on the common assumption that there was a valid OTT in place. Rolldeen had “crossed the line” so as “to manifest an assent to the assumption” when Mr Mufid submitted Form VAT1614A to HMRC and followed this with the letter to Officer Bounds. Both documents explicitly stated that Rolldeen had made no exempt supplies in relation to the Jubilee Centre, and both had been signed by Rolldeen’s director, Mr Shaheen.
(2) Rolldeen assumed responsibility for the common assumption when Form VAT1614A and the letter were sent to Officer Bounds.
(3) HMRC had relied on the common assumption that the OTT was valid.
(4) There was subsequent mutual dealing between the parties, because Rolldeen reclaimed input VAT on costs relating to the Jubilee Centre and HMRC had accepted that this VAT was validly deductible, and made any related repayments.
(5) HMRC would suffer significant detriment if there was no valid OTT, because there would be no VAT on the sale of the Jubilee Centre. In addition to that £50,000, Rolldeen had claimed significant input tax in relation to the Jubilee Centre, forming part of the £122,797.94 included on its VAT returns during the period for which Rolldeen had owned the property. HMRC was unable to recover that VAT because the Jubilee Centre had been sold on 2 March 2015. Almost eight years has passed since that date, well outside the time limit for raising an assessment (see VATA s 77(1)(a)).
[76] I agree with Mr Simpson that all the principles set out in Benchdollar are satisfied for the reasons he gives. I also agree that by signing and submitting the form VAT1614A, and subsequently confirming the position in the letter to Officer Bounds, Rolldeen’s conduct “crossed the line”, because it must have objectively intended that HMRC would accept that no previous exempt supplies had been made." (Rolldeen Estates Limited v. HMRC [2023] UKFTT 359 (TC), Judge Redston)
- T estopped from denying it was the person liable for customs debt
"[253] Dealing with the requirements seriatim, and employing the language the Supreme Court set out, first there was a common assumption of fact and law between HMRC who raise the estoppel and QHH against whom the estoppel was raised that QHH were liable for the customs debt. As we have set out at [94] above the conduct of QHH throughout crossed the line between the parties that cemented that common assumption. Secondly, QHH by its conduct and correspondence conveyed to HMRC that they expected HMRC to rely upon that common assumption so that QHH must bear not only some element but all of the responsibility for the common assumption. There were numerous occasions for QHH to either amend the customs declaration so that IDD’s EORI was shown or at least disabuse HMRC so as to be clear QHH were not liable for the customs debt. Instead, time after time, as we have found, QHH simply proceeded upon the assumption, common to both parties, that they were liable for the customs debt; expecting HMRC to proceed on that basis. Thirdly, HMRC relied upon that common assumption, not just its own view. Officer Katib formed her view that QHH were liable for the customs debt which was the reason for her compliance visit. What happened at that visit and thereafter, as we have found, demonstrates that her view was cemented by the common assumption shared by HMRC and QHH that QHH were liable for the customs debt. Fourthly, that reliance occurred in the subsequent dealings between the parties crystallising at the issue of the C18 Notice. Fifthly, the benefit to QHH of not being liable for the customs debt and the shared detriment to HMRC of that situation being able to be asserted would, before us, lead to the non-payment of six figures worth of duty when that customs debt was clearly owed by the VAT group member IDD, that group headed by QHH." (Quantum House Holdings Ltd v. HMRC [2025] UKFTT 117 (TC), Judge Rudolf KC)
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- T estopped from denying HMRC validly opened statutory enquiry
"[85] Standing back from the detail, what Mr Tinkler and his advisers have done is to take at a late stage what can fairly be described, on the facts of this case, as a technical point (that the notice of enquiry was sent to the wrong address) even though that has not caused Mr Tinkler any prejudice. It is entirely satisfactory that, by reference to estoppel by convention, the law has the means to avoid such a technical point succeeding." (Tinkler v. HMRC [2021] UKSC 39)
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- Taxpayer estopped from relying on illegality of conduct of HMRC to which it was a party/benefited from
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“In other words, the claim would be that the liability under the self-assessments (and therefore for the surcharges) arose because company income was declared on personal returns as the result of an (alleged) unlawful agreement with HMRC. Whether the agreement with HMRC was unlawful is a matter of public law, in other words, it is a question of whether HMRC exceeded the discretion entrusted to it by Parliament by entering into the 1999 and 2006 agreements which permitted Mr Byrne to declare company income on his personal return. Putting aside the issue whether this Tribunal has jurisdiction to consider a case that the (alleged) illegality of an act by HMRC should be a ‘defence’ for an appellant, it seems to us in any event that the appellant is estopped from asserting any illegality against HMRC when he was a party to the alleged unlawful agreement and clearly benefited from it. Therefore, we consider that even if he could prove illegality, and even if the Tribunal had jurisdiction to consider it, the appellant is estopped from alleging the illegality in these circumstances.” (Byrne v. HMRC [2017] UKFTT 144 (TC), §65, Judge Mosedale).
- HMRC not estopped from belatedly arguing that new claim settled by earlier proceedings
"[41] In the event, it is not necessary for us to resolve that issue or to determine whether HMRC can be said to have acquiesced in TTSL pursuing the Claim Appeal by failing to make their strike out application until July 2021. That is because we are satisfied that it is a necessary ingredient of estoppel by acquiescence, as for any estoppel by representation, that the party claiming the benefit of the estoppel has suffered detriment. The FTT made a clear finding that TTSL had not suffered any detriment and it has not appealed that finding." (Telent Technology Services Limited v. HMRC [2024] UKUT 183 (TCC), Green J and Judge Cannan)
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"[99] In my judgment, a party can change its view of the law at any time subject to the other party having a fair opportunity to respond. In other words, as Mr Elliott said, it is a matter of case management...
[100] Although the subject matter of Tower was closure notices and the context was the Tribunal’s jurisdiction to decide appeals under TMA s 50, it is clear that there is a wider application for the principle that a party may introduce new legal arguments subject to the requirements of proper case management...
...
[106] It follows from the above that the Appellant has not shown it has suffered detriment by way of costs or otherwise. I also considered Mr Jones’s submission that HMRC had acted unconscionably. However, as Lord Burrows said in Tinkler, this is the position only in “rare or exceptional cases”, and Mr Jones did not explain why this was such a case, and I could think of no basis on which it satisfied those requirements." (Telent Technology Services Limited v. HMRC [2022] UKFTT 147 (TC), Judge Redston)
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- T estopped from denying address provided was his address
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"[85] Those conditions apply to Mr Milhill:
(1) Mr Milhill was responsible for the mistaken assumption that the address provided to HMRC was his address, and he expected HMRC to rely upon that assumption.
(2) HMRC in fact relied upon that common assumption to a sufficient extent.
(3) That reliance occurred in connection with the subsequent mutual dealing between the parties in relation to Mr Milhill's tax affairs.
(4) If, in consequence, the decisions were not duly notified to Mr Milhill, that would be a detriment to HMRC, and it would be unjust or unconscionable for him to assert the true legal position.
(5) Mr Milhill's provision of Ms Griffiths' address to HMRC as being his own address "crossed the line" and the parties operated on the basis of that common mistaken assumption.
Therefore, even if the law of agency were not to apply, Mr Milhill would be estopped from relying on non-notification of the HMRC decisions which were sent to Ms Griffiths' address." (Milhill v. HMRC [2025] UKFTT 919 (TC), Judge Redston)
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- HMRC not estopped from denying EIS relief after granting authorisation letters
"[153] We do not consider there was any shared assumption or representation that could give rise to estoppel. The Appellants submitted their compliance statements asserting that the statutory requirements were met, and HMRC's authorisation did not, in our view, endorse those assertions. The language in the EIS2 authorisation letters, explicitly states that the authorisation does not guarantee the availability of relief and that the requirements of the scheme must continue to be met. We consider this negates any suggestion that it represented the requirements had been permanently satisfied. In these circumstances, we are unconvinced that HMRC waived its right to challenge compliance with the statutory requirements or that they are estopped from doing so, as relief is always subject to subsequent review and withdrawal under section 234." (York SD Limited v. HMRC [2025] UKFTT 877 (TC), Judge Sukul)
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