The Commissioners for HM Revenue and Customs v Raymond Tooth
| Jurisdiction | UK Non-devolved |
| Judge | Mr Justice Marcus Smith,Judge Hellier |
| Neutral Citation | [2018] UKUT 0038 (TCC) |
| Court | Upper Tribunal (Tax and Chancery Chamber) |
| Date | 07 February 2018 |
| Subject Matter | Tax,7 February 2018 |
| Published date | 07 February 2018 |
[2018] UKUT 0038 (TCC)
Appeal number: UT/2016/0131
INCOME TAX – discovery assessment – whether “discovery” – whether
insufficiency of tax brought about deliberately
UPPER TRIBUNAL
TAX AND CHANCERY CHAMBER
THE COMMISSIONERS FOR HER MAJESTY’S
REVENUE AND CUSTOMS
Appellant
- and -
RAYMOND TOOTH
Respondent
TRIBUNAL:
The Honourable Mr. Justice Marcus Smith
Judge Charles Hellier
Sitting in public at The Rolls Building, Fetter Lane, London EC4A 1NL on 4
December 2017
Richard Vallat, instructed by the General Counsel and Solicitor to HM Revenue
and Customs, for the Appellant
Julian Ghosh, Q.C. and Charles Bradley, instructed by Pinsent Masons LLP, for
the Respondent
© CROWN COPYRIGHT 2018
DECISION
A. INTRODUCTION
1. On 24 October 2014, the Appellant – the Commissioners for Her
Majesty’s Revenue and Customs (“HMRC”) – made a “discovery” assessment 5 under section 29 of the Taxes Management Act 1970 (“TMA”) in respect of
income tax for 2007-2008 in the sum of £475,498.20 in relation to the
Respondent’s (Mr. Tooth’s) participation in a failed tax avoidance scheme (the
“Assessment”).
2. A self-assessment had been contained in Mr. Tooth’s tax return, which 10 was made under section 8 TMA.
3. Section 29 TMA provides (so far as material):
“(1) If an officer of the Board or the Board discover, as regards any person (the
taxpayer) and a year of assessment –
(a) that any income which ought to have been assessed to income tax, or chargeable 15 gains which ought to have been assessed to capital gains tax, have not been assessed, or
(b) that an assessment to tax is or has become insufficient, or
(c) that any relief which has been given is or has become excessive
the officer or, as the case may be, the Board may, subject to subsections (2) and (3)
below, make an assessment in the amount, or the further amount, which ought in his or 20 their opinion to be charged in order to make good to the Crown the loss of tax.
…
(3) Where the taxpayer has made and delivered a return under section 8 or 8A of this
Act in respect of the relevant year of assessment, he shall not be assessed under
subsection (1) above – 25
(a) in respect of the year of assessment mentioned in that subsection; and
(b) in the same capacity as that in which he made and delivered the return,
unless one of the two conditions mentioned below is fulfilled.
(4) The first condition is that the situation mentioned in subsection (1) was brought
about carelessly or deliberately by the taxpayer or a person acting on his behalf. 30
(5) The second condition is that at the time when an officer of the Board –
(a) ceased to be entitled to give notice of his intention in enquire into the taxpayer’s
return under section 8 or 8A of this Act in respect of the relevant year of assessment; or
(b) informed the taxpayer that he had completed his enquiries into that return,
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