14 May 2021
HMRC v Tooth; (SC)
The Supreme Court has dismissed HMRC’s appeal in a case concerning the validity of a ‘discovery’ assessment made in reliance on the 20-year time limit.
The Court held, overruling the Court of Appeal on this point, that a ‘deliberate inaccuracy in a document’ within s 118(7) TMA 1970 means an inaccuracy by which the taxpayer intends to mislead HMRC. There was no such inaccuracy in the taxpayer’s return and accordingly the assessment was out of time.
The Court also held that there was no basis in the relevant legislation for the proposition that a ‘discovery’ within s 29(1) TMA 1970 could become ‘stale’ if too long a time elapsed between the ‘discovery’ and the assessment.
Read the judgment here.
Charles Bradley (led by Julian Ghosh QC) was instructed on behalf of the respondent taxpayer.