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HMRC v R Tooth

In HMRC v R Tooth [2021] UKSC 17 (14 May 2021) the Supreme Court has found unanimously in favour of the tax-payer that he had not made a deliberate inaccuracy in his return and therefore the discovery assessment raised against him was invalid. The Court also concluded that there is no concept of staleness in the statutory scheme for raising discovery assessments.

Mr Tooth had entered into an avoidance scheme which ultimately proved ineffective. He had entered the loss which he believed had been generated by the scheme into his tax return to set it off against his in year and prior year income before (2007–2009). Due to issues with the self-assessment software he had been unable to complete the employment loss box so he entered it as a partnership loss explaining in the white space that it was really an employment loss.

HMRC raised a discovery assessment against...

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