The UK Supreme Court in Tinkler v Commissioners for Her Majesty’s Revenue and Customs  has clarified the circumstances for such an estoppel to arise. The issue in the case was whether the taxpayer, Mr Tinkler, was estopped from challenging the validity of the enquiry into his tax affairs by the Revenue, in circumstances where both parties had proceeded for nearly a decade on the mistaken assumption that the enquiry had been validly initiated by the Revenue. The Court of Appeal had held that Mr Tinkler was not so estopped. The Supreme Court reversed that decision.

1. The parties’ common assumption must be expressly or impliedly shared between them; a mere understanding is not enough. There must be a sufficient manifestation by the parties of an assent to the assumption;
2. The expression of the common assumption by the party (B) alleged to be estopped, must be such that Party B may properly be said to have assumed an element of responsibility, in the sense of conveying to the party alleging the estoppel (A) an understanding that Party B expected party A to rely on the common assumption;
3. Party A must have relied on the common assumption, rather than on his own independent view of it;
4. Party A’s reliance must have occurred in connection with some subsequent dealing between him and Party B; and
5. Party A must have suffered some detriment, or Party B must have acquired some benefit, sufficient to make it unconscionable for Party B to assert the true position.

The decision is a welcome clarification of this species of estoppel.