A recent case (Pendle v HMRC [2015] UKFTT 27 (TC)) reminded me that not all tax cases concern the narrow construction of complex language. Some of them involve appeals to general principles, or to ancient laws, or are just plain daft.
Human rights
Mr Pendle invoked the 1689 Bill of Rights as his excuse for not signing the declaration on his self-assessment return. The statement on the return includes the words “I understand that I may have to pay financial penalties and face prosecution if I give false information” and Mr Pendle argued that by signing this he would be signing away his constitutional rights. After a penalty of £100, Mr Pendle swallowed his principles and signed the declaration, but appealed against the penalty. The Tribunal took him seriously, and the report of the case includes a learned exposition of why the declaration is not contrary to the Bill of Rights.
He was not the first taxpayer to object to tax on the grounds of Human Rights. Two cases actually made it to the European Court of Human Rights – both from Quakers, one of whom argued that by using some of his tax payments to fund military expenditure, the British government was violating his right to freedom of religion under Article 9 of the Convention. The other deducted a reduced amount of PAYE from employees’ pay, again on the grounds that Quakers should not be forced to subsidise military expenditure (ECHR cases 10358/83 and 11991/86).
They both lost.
Impossible to follow
Back in 1970, a master stonemason named Mr Lloyd (who was also a rolled up trouser type of mason) argued that he was exempt from income tax because – well, his reasons were not clear but he said they were the fruit of 20 years of research and involved treating the Bible as a coded key to the meaning of various items such as coins, furniture, and the Royal Cypher. Apparently this proved (to Mr Lloyd’s satisfaction at least) that as a mason, he was exempt from income tax because “It restricts his carving, which inspires all people to keep the rules of citizenship”.
The High Court agreed with the lower court that his argument was “…so highly technical and so different from the normal line of thought that it was impossible to follow…”, and informed Mr Lloyd that he would have to carry on paying income tax like the rest of us (Lloyd v Taylor, Ch D 1970, 46 TC 539).
Brave attempts
In 1988, a Mr Hebden also claimed to be exempt, this time because he was unable to stand for Parliament. Pressed as to why he was unable to stand, he explained that he was psychic and that he was unable to stand for election because ‘psychic control’ prevented him (Hebden v Pepper [1988] STC 821).
The High Court pointed out that various other persons, such as infants and prison inmates, could not be elected to Parliament, but were nevertheless liable to tax, and dismissed his appeal.
Mr Bell claimed in 2009 that by joining the EU, the UK had surrendered its right to levy taxes, and also that tax violated his right to own property, under Article 1 of the first protocol to the European Convention on Human Rights. He also lost his case (Bell v HMRC [2009] UKFTT 270 (TC)).
In view of the proximity of April Fools’ Day, I should point out that the above are all real cases.
Practical Tip:
If you believe there is a reason why you are exempt from tax which is known only to you, you are almost certainly wrong!
