Error on assessment did not invalidate discovery

The taxpayer company TSS Fire Ltd was owned by Mr Porter and his wife. He was the sole director. It had taken over the trade of another company controlled by Mr Porter Trojan Safety Systems Ltd – which was later liquidated with outstanding debts. A debt owed by Mr Porter was written off.

HMRC opened VAT PAYE and construction industry scheme checks into TSS which culminated in a referral to the fraud investigation service (FIS). Mr Porter took part in the contractual disclosure facility (CDF) and acknowledged that he had failed to give his agent the relevant information needed for his returns and that this constituted ‘fraudulent behaviour’. He also disclosed that he had drawn funds without operating a PAYE or dividend procedure and that he ‘benefited by paying insufficient tax’.

HMRC issued CTA 2010 s 455 assessments to the company and a discovery...