K Mehrban v HMRC [2021] UKFTT 53 (TC) (25 February 2021) is the latest in a line of cases examining whether and in what circumstances a discovery made by HMRC can become ‘stale’ such that a discovery assessment cannot be validly raised.
The appellant owned and operated a general retail store. The First-tier Tribunal agreed with HMRC that following an investigation carried out in 2013 and early 2014 a discovery had been made that the appellant had understated his profits. The FTT identified the HMRC compliance officer who had made the discovery and concluded that it had been made at the very latest on or around 25 March 2014. Income tax assessments for a number of years were duly raised under TMA 1970 s 29 (discovery assessments) but not until 21 April 2017. In the meantime there had been correspondence between HMRC the appellant...
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