Hugh Gunson and Guy Bud explain the experiences of start-up Fashion on the Block after in inadvertently filed the wrong form with HMRC – and it makes for sober reading.
Everyone knows how it feels to discover that they have made a really big mistake. The stomach drops. How could this have happened? Then, amid the incomprehension and anguish, you begin to think desperately about whether it can be undone.
Rectification is available in a tax context, where mistakes can be very big and costly indeed, when something has been done by the parties which did not reflect their intention and/or have the desired tax effect. It is a particularly powerful remedy, as it can effectively undo the mistake and the related tax consequences with retrospective effect. But it is also a closely guarded one. As one of a number of equitable remedy, it is the province of the High Court, where even a straightforward and uncontested application can seem beyond the means of many taxpayers.
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