No deliberate inaccuracy on tax return

In January 2009 the taxpayer filed his 2007-08 tax return using HMRC-approved software. He had taken part in a tax avoidance scheme and wanted to use the losses from the scheme to reduce his income tax liability. Due to a technical software issue with the form the taxpayer was unable to enter the losses from the scheme as an employment-related loss. Instead he entered the loss on the partnership pages and explained in the adjacent white space that rather than a partnership loss it was an employment-related loss.

HMRC disagreed. It issued a discovery assessment (TMA 1970 s 29) against which the taxpayer appealed. The First-tier Tribunal allowed his appeal. The Upper Tribunal and Court of Appeal dismissed HMRC’s subsequent appeals.

In the Supreme Court Lord Briggs and Lord Sales gave a joint judgment with the other members of the court agreed. On the...