This was an unusual case in that there was no dispute about the facts, or about the existence of a discovery by HMRC. HMRC also accepted that the taxpayer’s behaviour was neither careless nor deliberate (Scott v HMRC [2023] UKFTT 360 (TC)).
Where there is no careless or deliberate behaviour, the standard discovery assessment time limit is four years (TMA 1970, s. 34). However, the standard limits may be altered in relation to offshore matters by:
- F(No. 2)A 2017, Sch. 18, para. 26 where “a person has relevant offshore tax non-compliance to correct”; or
- TMA 1970, s. 36A for certain tax losses involving an offshore matter or an offshore transfer.
The taxpayer argued that only s. 36A applied and that it followed that the assessments were out of time, as “if both para 26 and section 36A can apply to an assessment for the periods 2013-14 and 2014-15, the wording in section 80(5) has no effect and this cannot be correct”.
However, the FTT did not agree with this analysis and dismissed the appeal.
https://www.bailii.org/uk/cases/UKFTT/TC/2023/TC08784.html
Related content from Claritax Books
Discovery Assessments, by tax barrister Keith Gordon, is a detailed, clearly written guide to the law and practice in this area. Based on the author’s personal involvement in many leading cases, the book contains much practical advice explaining when and how such assessments may be challenged.
