Negligence - Professional Negligence: Accountants: Capital Gains Tax: Professional Negligence: Roll over relief: Negligence in computation of sum of relief: Assessment of Capital Gains Tax: s.36 Taxes Management Act 1970.

Where a sum claimed in respect of roll over relief was clearly wrong it necessarily followed that the accountants concerned had not applied the proper degree of care to the computation of it.

The appellant (M) appealed by way of case stated against the decision of the General Commissioners to uphold an assessment of capital gains tax pursuant to the Taxes Management Act 1970 s.36. The assessment had determined, inter alia, that computations supplied to the Revenue by M's former accountants had been negligent. In particular, roll over relief in respect of a farm and stables had been claimed in the sum of £332.500 whereas the correct figure was £57,500. M argued that it had not been open to the General Commissioners to conclude that he had not incurred the claimed expense nor that his accountants had been negligent.

HELD: Whilst the court could not say that it would have reached the same conclusion as the General Commissioners, it had been open to them to reach the conclusion that they had reached. There was no error of law. Moreover, there was no error of law in the finding of negligence on the part of M's former accountants. Since the sum claimed in respect of roll over relief was wrong it necessarily followed that the accountants had not applied the proper degree of care to the computation of it. It had been open to the Inspector initially to take those computations at face value without then making further enquiries.

Appeal dismissed.

Mcewan v Martin (HMIT) (2005)

Ch D (Park J) 20/1/2005

"Lawtel": 24.1.05