In J Hicks v HMRC, the First-tier Tribunal held that discovery assessments issued by HMRC were invalid, as the condition contained in TMA 1970 s 29(5) was not satisfied. Section 29(5) requires that when the enquiry window has closed, a hypothetical HMRC officer could not reasonably have been expected, on the information available to him before that time, to be aware of the insufficiency of tax. The taxpayer had provided sufficient information to HMRC, including a scheme reference number (SRN) which had been provided by HMRC following disclosure of the tax avoidance scheme under the DOTAS rules. In relying on assistance from his professional advisers, the taxpayer had not been ‘careless’ when submitting his tax return in an earlier year.
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