HMRC v R Tooth

In HMRC v R Tooth [2018] UKUT 38 (7 February 2018) the UT found that a discovery assessment had been invalid on several counts.

Mr Tooth had appealed against a discovery assessment issued by HMRC in relation to his participation in a failed avoidance scheme. The FTT had found that HMRC had made a discovery but that the insufficiency of tax had not been brought about deliberately so that the discovery assessment was invalid.

HMRC contended that the FTT had erred in law in relation to the latter point. The UT therefore had to decide whether the insufficiency of tax in Mr Tooth’s return (and the accompanying computations) had been deliberate. Mr Tooth had acknowledged in his return that his interpretation of the tax applicable ‘may be at variance with that of HM Revenue & Customs’ and it was now established (following Cotter [2013] UKSC 69) that the deduction...