In R Tooth v HMRC [2016] UKFTT 723 (25 October 2016) the FTT found that a discovery assessment was not valid even though HMRC had established both an inaccuracy in the taxpayer’s return and an insufficiency of tax.
Mr Tooth appealed against a discovery assessment issued by HMRC in relation to his participation in a failed avoidance scheme.
The first issue was whether when the assessment was made on 24 October 2014 the discovery was ‘stale’ so that the right to make an assessment was lost. The FTT noted that the threshold for a discovery was low following Charlton Corfield [2013] STC 866 and included a ‘change of view change of opinion or correction of an oversight’. It added that an HMRC officer had reviewed Mr Tooth’s file in the light of the decision in Cotter [2013] STC 2480 in October 2014...
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