R Smith v HMRC

In R Smith v HMRC (TC02768 – 5 July) the appellant (S) had in 2000/01 entered into an avoidance scheme which was broadly similar to that which was subsequently held to be ineffective in Drummond v HMRC [2009] STC 2206. HMRC issued a discovery assessment. S appealed contending that the effect of the decision in HMRC v Dr M Charlton (and related appeals) [2012] UKUT 770 (TCC) was that the assessment was invalid. The First-tier Tribunal rejected this contention specifically distinguishing the decision in Charlton. Judge Kempster observed that ‘in Charlton the taxpayers’ returns included the scheme reference number that had been allocated by HMRC when the tax avoidance scheme had been registered by the scheme promoters’. Furthermore in the Charlton case the Ch D decision in Drummond had been issued before the closure of the relevant enquiry window. In the...