Easinghall Ltd v Revenue & Customs [2014] UKFTT 677 (TC) (10 July 2014)

Easinghall Ltd v Revenue & Customs [2014] UKFTT 677 (TC) (10 July 2014)

The agreement between the company and HMRC regarding the 2011/12 discovery assessment was limited to the insufficiency of evidence for presumption of continuity, not to the accuracy of the return or suppression of profits. Therefore, HMRC is not precluded from continuing the enquiry or making amendments based on new information, and it is reasonable for HMRC to continue the enquiry until the necessary information is obtained.

Citation
[2014] UKFTT 677 (TC)
Parties
Appellant: Easinghall Ltd; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
10 July 2014
Procedural Posture
Application for Closure Notice (corporation Tax) / First Tier Tribunal (tax Chamber) Decision
Outcome
Application for closure notice refused
Legal Topics
Closure Notice, Discovery Assessment, Self Assessment, Finality of Agreements, Scope of Enquiry, Legitimate Expectation
Tax Law Corporation Tax Closure Notice Discovery Assessment Self Assessment Finality of Agreements Scope of Enquiry Legitimate Expectation

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Parties

Easinghall Ltd

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

Application for Closure Notice (corporation Tax) / First Tier Tribunal (tax Chamber) Decision

Legal Issues

  1. 1 Whether HMRC had reasonable grounds to continue an enquiry into the company's 2011/12 tax return after a discovery assessment was settled by agreement under section 54 TMA 1970
  2. 2 Whether the agreement precluded further enquiry or amendment to the return on the same issue

Ratio Decidendi

The agreement between the company and HMRC regarding the 2011/12 discovery assessment was limited to the insufficiency of evidence for presumption of continuity, not to the accuracy of the return or suppression of profits. Therefore, HMRC is not precluded from continuing the enquiry or making amendments based on new information, and it is reasonable for HMRC to continue the enquiry until the necessary information is obtained.

Court Disposition

Application for closure notice refused

Orders

  • No direction is made under paragraph 33 Schedule 18 FA 1998; HMRC may continue the enquiry into the 2011/12 return.