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Invitation to make voluntary restitution: accept?

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This concerns a disclosure under the Worldwide Disclosure Facility. My view was that there was sufficient culpability to go back more than 6 years. HMRC disagreed (!) and invited an offer on equitable grounds aka voluntary restitution. HMRC emphasise that there is no obligation on the taxpayer to do so.

If I advise my client to decline to make a voluntary restitution for the out of time years, can HMRC come back with discovery?

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By Red Leader
24th Sep 2019 14:14

Any thoughts?

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By Tax Dragon
24th Sep 2019 17:38

I don't think it's your place to advise your client on how to make what is essentially a moral decision. If (but perhaps only if) your client decides to decline the invitation to make restitution, I think you should give advice in relation to HMRC's powers to assess tax.

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Replying to Tax Dragon:
By Red Leader
24th Sep 2019 20:23

OK, thanks. Do you think HMRC have discovery powers in these circumstances?

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By unearned luck
25th Sep 2019 20:25

From a letter enclosing a DA “We have considered again our position as regards the continued under-assessment in your client’s 2008/09 self-assessment in the light of your client’s declining to make an offer of voluntary restitution.”

I have appealed the DA and am reasonably confident that the FTT won't up hold it.

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By mail.taxperfect.co.uk
16th Oct 2019 18:01

In my experience, Discovery has only been made when an error has been found in an in-date Return, then HMRC can go back 6 or 20 years (depending on taxpayer behaviour).

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Replying to mail.taxperfect.co.uk:
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By unearned luck
16th Oct 2019 22:37

You mean "...0, 4, 6 or 20 years...".
-TP took reasonable care and made full disclosure: no valid DA, so HMRC have until enquiry window closes to open an enquiry or are stuffed.
-TP took reasonable care but didn't make full disclosure: 4 years
-TP or person acting on TP's behalf careless: 6 years (or longer if an offshore matter)
-TP or person acting on TP's behalf making deliberate underassessment: 20 years
'Deliberate' was thought to mean tantamount to fraud but in Tooth the CoA rejected the notion that it needed blameworthy conduct to apply.

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