HMRC v Hicks

In HMRC v Hicks [2020] UKUT 12 (TCC) (14 January 2020) the Upper Tribunal found that discovery assessments were valid on grounds that an insufficiency of tax had been brought about carelessly by a person acting on behalf of the taxpayer.

In 2008/09 the taxpayer (H) entered into a tax-avoidance scheme disclosed to HMRC under the DOTAS rules. Under the scheme H would acquire dividend rights as a derivative trader with the cost of those rights being a deductible expense of that trade but with the dividend income escaping the charge to tax as a result of ICTA 1988 s 730 (since repealed by FA 2009). H sought to carry forward the resulting loss against taxable profits of his trade for the next two tax years (2009/10 and 2010/11) reducing those profits to nil.

HMRC opened an enquiry into H’s 2008/09 tax return but...

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