When is a discovery assessment stale?

The taxpayer owned and operated a general retail store. After an investigation carried out in 2013 and 2014 HMRC concluded the business profits had been understated. In April 2017 it raised discovery assessments for several years under TMA 1970 s 29. In the intervening years correspondence took place to enable HMRC to obtain further information in order to quantify the understatement of profit. There was a delay in the provision of some of the information due to the taxpayer’s ill health.

The taxpayer appealed against the assessments.

The First-tier Tribunal accepted that an HMRC discovery found there was an insufficiency of tax. The issue was whether the discovery had become stale by the time the assessments were issued. The tribunal said some doubt has been cast on whether the concept of staleness existed but in its view there could be little doubt that it...