In this post, Tim Sales, a partner in the Dispute Resolution team at CMS, and Hannah Jones, who works in the Tax team at CMS, comment on the decision handed down by the UK Supreme Court in the matter of Tinkler v Commissioners for Her Majesty’s Revenue and Customs [2021] UKSC 39, which concerned whether estoppel by convention applied to prevent the taxpayer disputing that HMRC had validly served a notice of enquiry.

This case relates to a closure notice issued by HMRC in respect of Mr Tinkler’s tax return for tax year 2003/2004. The closure notice purported to amend Mr Tinkler’s tax return for tax year 2003/2004 and so close his appeal in relation to that return.

The question arose, late in the day,  whether the notice of enquiry in respect of which the closure notice was issued had been properly served. Mr Tinkler and his accountants (BDO Hoy Stayward (“BDO”)) were of the view that (i) the notice of enquiry had not been validly served and therefore (ii) that the enquiry had not been validly opened, and so (iii) the closure notice purporting to amend the return and close the appeal was invalid.

This issue before the courts was separate from Mr Tinkler’s substantive appeal in relation to the content of the tax return (which related to losses claimed by Mr Tinkler which were disallowed by HMRC).


In order to open an enquiry into a return under section 9A(1)(a) of the Taxes Management Act 1970, HMRC must give notice of their intention to do so “to the person to whose return it is” (“the taxpayer”).

Section 115 of the Taxes Management Act 1970 sets out that such notice should be served on the taxpayer by sending it to their “usual or last known place of residence”.

Key to Mr Tinkler’s argument, raised for the first time shortly before the hearing in the First Tier Tribunal (“FTT”), was that HMRC sent the notice of enquiry to an address at which Mr Tinkler no longer resided (“Heybridge Lane”), and which was different from the address (“Station Road”), which was specified as Mr Tinkler’s address in two documents submitted to HMRC – a Form 64-8 and the 2003/2004 tax return itself. The FTT found that Heybridge Lane was not Mr Tinkler’s “usual or last known place of residence” and that he never received the notice.  As such, Mr Tinkler argued that  the notice of enquiry was not validly served, and therefore the enquiry to which the closure notice related could not have been validly opened.

However, HMRC also sent a copy of the notice of enquiry to Mr Tinkler’s accountants BDO, along with a letter raising questions in relation to the enquiry into the return. BDO acknowledged receipt and proceeded to substantively correspond with HMRC on the return.

In brief, HMRC therefore made the following arguments:

  1. that, because Mr Tinkler had signed a Form 64-8 authorising BDO to correspond with HMRC in respect of certain of his tax affairs, the notice of enquiry had been validly served on Mr Tinkler (ie the “taxpayer”) by serving it on his agent – BDO.
  2. that, because BDO acknowledged the copy of the notice of enquiry and substantively corresponded with HMRC on the relevant tax return, Mr Tinkler had been estopped by convention from denying that HMRC had opened a valid enquiry.

The Court of Appeal found in favour of Mr Tinkler on point (1) above (ie that BDO had no actual or apparent authority to act as agent for Mr Tinkler in respect of service of the notice of enquiry), and this point was not appealed by HMRC. HMRC’s appeal to the Supreme Court was on the sole ground that Mr Tinkler was estopped by convention from denying that the enquiry had been validly opened.

The agency argument – the engagement letter and Form 64-8

While not relevant to the Supreme Court proceedings, it is worth briefly considering on the parties’ arguments concerning point (1) above (ie the agency issue).

Reflecting on the precise terms of engagement between Mr Tinkler and BDO, and the content of – and a linked HMRC webpage relating to – Form 64-8 is crucial for understanding the parties’ arguments concerning whether BDO was in fact agent for Mr Tinkler in respect of service of the notice of enquiry.

In brief, Form 64-8 in an HMRC form authorising HMRC to correspond with the taxpayer’s named agent. The engagement letter issued by BDO and signed by Mr Tinkler required Mr Tinkler to sign a Form 64-8, stating as follows:

the Inland Revenue will treat this as authority to correspond with us [ie BDO], in which case they will not correspond with you except to the extent formally required to do so. However, this does not apply to all Inland Revenue forms and notices”.

It also set out that additional work, such as “dealing with Inland Revenue enquiries into your tax return”, would be a separate engagement for which additional fees would be charged.

The Form 64-8 contained the following statements:

3     What this authority means

This authority allows us to exchange information about you with your agent, and to deal with them on any matters within the responsibility of the Inland Revenue.

Once we have received your authority we will start sending letters and forms to your agent. But sometimes we need to send them to you as well as, or instead of, your agent. For the latest information on what forms we send automatically visit our website at [web address]….

The webpage and the link at the time read as follows:”

Enquiry forms

HMRC has agreed with the professional bodies that where there is an ‘enquiry’, HMRC will correspond with the agent where one is authorised. The practical effect of the agreement is that while a formal notice of enquiry must be given to the client, correspondence can be addressed to the agent.”

The Court of Appeal held that BDO had no apparent or actual authority to receive the notice of enquiry on behalf of Mr Tinkler. Central to their decision on this subject was that HMRC’s linked webpage to the Form 64-8 contained a “clearly expressed limitation on the general authority being sought by HMRC and the corresponding represented authority of the agent”.

The estoppel argument – what is “estoppel by convention”?

It was HMRC’s argument that Mr Tickler was “estopped by convention” from denying that the enquiry had not been validly opened.

As summarised in Chitty on Contracts (32nd edn, 2015) at 4–108 (and referred to in both the Court of Appeal and Supreme Court judgments):

“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.”

In a case law context, the five principles governing estoppel by convention were outlined in the decision of Briggs J in Revenue and Customs Commissioners v Benchdollar [2009] EWHC 1310 (Ch) (“Benchdollar”). These principles (as approved and slightly amended by Blindley Heath Investments Ltd & Anor v Bass [2015] EWCA Civ 1023 (“Blindley Heath”)) were referred to in Lord Burrows’ Supreme Court judgment:

  1. It is not enough that the common assumption is merely understood by the parties in the same way. It must be expressly or impliedly shared between them. Something must ‘cross the line’ between the parties sufficient to manifest an assent to the assumption.
  2. The expression of the common assumption by the party alleged to be estopped (“D”) 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 party raising the estoppel (“C”) an understanding that they expected C to rely upon it.
  3. C must in fact have relied upon the common assumption rather than merely upon C’s 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 C, or benefit accrued to D, sufficient to make it unconscionable for D to assert the true legal or factual position.

Further, in considering principles (1) to (5) above, C must rely on the affirmation of the common assumption by D, and the latter must intend or expect that reliance.

Decisions of the lower courts on the “estoppel by convention” argument


The FTT found in favour of HMRC on the estoppel argument. They held that it would be “unconscionable” for Mr Tinkler to go back on the shared mistaken assumption that a valid enquiry had been opened.

In particular, the tribunal judge (Judge Barbara Mosedale) pointed to the fact that BDO, sharing the mistaken assumption that the enquiry was validly opened, actively engaged with the enquiry, and that this led HMRC to acting differently to how they would otherwise have acted and in a way detrimental to HMRC’s interests (because, for example, Judge Barbara Mosedale posited, if BDO had not acted in this way, HMRC would likely have re-issued to the notice of enquiry to the Station Road address within the applicable time limit).

Upper Tribunal (“UT”)

Mr Tinkler appealed, and HMRC cross-appealed, to the UT, who, conversely on the estoppel issue, held that no estoppel by convention was made out on the facts. This was because Mr Tinkler (acting through BDO) could not “properly be said to have assumed some element of responsibility for the assumption that the enquiry had been validly opened, in the sense of conveying to HMRC an understanding that he expected them to rely on”.

Further, the UT found that – even if estoppel by convention were made out on the facts – it could not apply in Mr Tinkler’s situation, because, in line with Keen v Holland [1984] 1 WLR 251, the estoppel would undermine the statutory protection given by section 9A of the Taxes Management Act 1970 requiring notice of an enquiry to be given to the person to whose return it is.

Court of Appeal

The Court of Appeal agreed with the UT’s decision that Mr Tinkler was not estopped by convention from denying that HMRC had validly opened an enquiry, because (applying the Benchdollar principles as approved and amended in Brindley Heath) BDO had not assumed the requisite element of responsibility for the common assumption; and the requisite unconscionability was also not made out.

The strength of the comments made in Hamblen LJ’s judgment is noteworthy (particularly in light of the Supreme Court’s differing judgment on the estoppel argument):

This is a case in which HMRC have only themselves to blame for what occurred. They were at fault in sending the notice of enquiry to the wrong address. They misled BDO into assuming that an enquiry had been validly opened. BDO did nothing to cause the adoption of the mistaken assumption. In all the circumstances of the present case, any acquiescence by BDO in HMRC’s mistaken assumption is insufficient to found unconscionability.”

Hamblen LJ did not consider it necessary to consider whether estoppel would undermine the statutory protection given by section 9A of the Taxes Management Act 1970, but did note that he “would take some persuading that Keen v Holland is analogous”.