Preconditions to making a discovery assessment

The taxpayer submitted a 2000-01 self-assessment tax return stating he was not resident in the UK in the year. HMRC disagreed and raised a discovery assessment on the income and gains. The taxpayer appealed although he accepted that he had been UK resident.

The First-tier Tribunal allowed his appeal on the basis the discovery on which the assessment was based was stale. However it found in favour of HMRC on the negligence information and practice conditions in TMA 1970 s 29.

HMRC appealed against the tribunal’s conclusion on the staleness point. Both parties agreed that this should be allowed in light of the Supreme Court’s decision in CRC v Tooth [2021] STC 1049 – in which the judges found there was no place for the notion of staleness in discovery.

However the taxpayer challenged the tribunal’s conclusions in relation to the information negligence and practice...