No deliberate intent

Nature of insufficiency of tax

The taxpayer took part in a scheme to mitigate tax. He claimed the resulting loss in his 2007-08 tax return. After an enquiry in October 2014 HMRC issued a discovery assessment. The taxpayer appealed.

The First-tier Tribunal said the discovery relied on there being an insufficiency of income tax declared in the taxpayer’s return. Since this was first identified by HMRC in August 2009 the taxpayer said it could not have ‘newly appeared’ to an officer in 2014. There was therefore no discovery within TMA 1970 s 29(1). In any event it was stale by then and HMRC’s right to make the assessment was lost.

The tribunal noted that the threshold for a discovery was low (Charlton and others v CRC [2013] STC 866) and included a ‘change of view change of opinion or correction of an oversight’....