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OK I understand what you mean by distinguishing 'real' and 'sham' elections now.

But Monica's point still stands that the source of the DMG difficulty is that the statutory scheme imposed liability and then required the taxpayer to take positive steps to bring itself within an exception in order to avoid paying the tax. Her further point also stands that this general approach is replicated in many other tax statutes and that it would be undesirable to let the Revenue escape restitutionary liability across the board wherever tax liability is incurred on a 'liable until proved innocent' basis. This seems to me to be true whether or not the taxpayers in each of these situations could have had 'real' reasons for not making an election to escape liability.

C

Quoting Robert Stevens :

I am arguing that there may be good commercial reasons for choosing not to elect to defer to pay Advanced Corporation Tax under section 247 of the Income and Corporation Taxes Act 1988. This is because of the ability to set of ACT against Corporation Tax contained in section 239. The election is therefore "real" in the sense that a group may sensibly choose not to defer. Therefore I don't agree with Monica that "the Revenue chose to use a mechanism for such an exemption that allowed them to collect information earlier." That is not the reason why the ability to elect is in the legislation. See also the ability to make a partial election.

DMG never elected. They were unlawfully denied the choice to elect but that does not mean they should be deemed to have done so. Any such deeming would be fictional. The money was due. A claim for restitution should have failed. A better route is to say that there was a claim in tort for breach of Art 52 of the EC treaty (now Art 43): see R v Secretary of State for Transport, ex p. Factortame (no 7) [2001] 1 WLR 942.