Share this content

CoA Tooth decision: deliberate inaccuracy/stale DA

Didn't find your answer?

Search AccountingWEB

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 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: 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 ) should be OK per previous comments here).


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."

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:



Please login or register to join the discussion.

06th Jun 2019 12:55

This latest case on "deliberate" is interesting for its Tooth comments (and narrows that CoA interpretation as expected):

However, it begs the question (as does Tooth) as to deliberateness if no tax return is sent to HMRC at all (which perhaps ironically seems to be less deliberate), although the FTN 20 year time limit seems to step in there (as a bit of a fudge argument to justify the CoA dicta it seems).

Thanks (0)
Share this content