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CoA Tooth decision: deliberate inaccuracy/stale DA

https://www.bailii.org/ew/cases/EWCA/Civ/2019/826.html

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Taxpayer won. Surprisingly CoA seem to have confirmed staleness as a concept re discovery assessments (indeed, and perhaps more surprisingly, this did not even seem to be argued by HMRC's counsel as being incorrect law - see para 60 here http://financeandtax.decisions.tribunals.gov.uk//judgmentfiles/j11104/TC07140.pdf and ironically this newness requirement was first argued by HMRC's counsel in HMRC's favour to justify a valid discovery at para 44 here: http://www.bailii.org/uk/cases/UKSPC/2008/SPC00692.html). Their conclusion on deliberateness is very bizarre/confusing though (fortunately their comments seem to be confined to non-dishonest deliberate inaccuracies, so documents filed accurately and non-dishonestly albeit wrong (for whatever reason e.g. wrong interpretation of tax law under legal advice or simply a tenable view of tax law e.g. see para 54 here https://www.bailii.org/uk/cases/UKFTT/TC/2019/TC07118.html ) should be OK per previous comments here).

https://www.bailii.org/ew/cases/EWCA/Civ/2019/826.html

See: https://www.accountancydaily.co/discovery-decision-may-make-it-harder-ob...

Why didn't HMRC just retrospectively (for the previous 20 years if necessary) block this highly aggressive and abusive tax avoidance scheme (as they have done in other cases)?

"Q31 Chair: Can I tell you what really shocked me about you? I have another bit of paper here headed "Rushmore: the arrangement". A client signs this document, which says, "Please accept this as my instruction to create gross tax relief of," in this case, "£250,000 through the Rushmore income tax and chargeable gains tax mitigation arrangement developed by NT (Jersey) Ltd". In 2007-08, this person put down £125,000. In 2008-09, they wanted £125,000, and they sign it. If the public knew that this was the sort of business you were in-deliberately avoiding tax-they would consider you to be completely, utterly and totally immoral in the work that you are doing."

https://publications.parliament.uk/pa/cm201213/cmselect/cmpubacc/uc788-i...

Para 27 shows HMRC botched this retrospective blocking of the scheme. For example, HMRC could have simply had a requirement for all scheme users to re-file their tax return showing the tax due (like a Follower Notice). See page 11 here:

https://webarchive.nationalarchives.gov.uk/20140122194050/http://www.lev...

 

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