HMRC had sufficient information

Conditions for discovery assessments

HMRC raised discovery assessments for trading losses the taxpayer claimed had resulted from arrangements devised by Montpelier. The taxpayer appealed saying the assessments were not valid. The effectiveness of the scheme generating the losses was not at issue.

On whether there had been a discovery the taxpayer said it had ‘lost its newness’ by the time the assessments were issued. The officer who issued the assessments became involved in the case in January 2014. At this stage HMRC was gathering information on the scheme in relation to three representative members but not the taxpayer. The officer had to spend time understanding the facts and HMRC’s arguments. In November 2014 having concluded the scheme did not work he wrote to the taxpayer setting out his conclusions and seeking a settlement. In March 2015 he issued the assessments.

The First-tier Tribunal decided that...