Taxpayers can sue HMRC following court ruling

News Article - 30 October 2007
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A decision by the court of appeal has found that HM Revenue & Customs (HMRC) does have a duty of care to a taxpayer in certain circumstances.

Neil Martin, a builder, lost £500,000 because of a number of errors made by HMRC when it processed his company's CIS application. The court ruled unanimously in favour of Martin under a common law duty of care owed to the taxpayer.

Tax-news.com reports that the verdict was welcomed by Professional Contractors Group (PCG), who campaign for fairer treatment by HMRC.

"This is a complex judgement … we are studying it closely to work out its implications. But in the meantime we can say that it seems to be, at the very least, a step in the right direction," said PCG's managing director John Brazier.

The case follows a previous high court ruling in 2006, which ruled that HMRC had no duty of care in the case of negligence.

AccountingWEB claims "the case has huge ramifications" but that HMRC may still appeal the decision in the House of Lords.

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