Lowe v Revenue and Customs (INCOME TAX - discovery assessments for four tax years - issue relates to travel and subsistence expenses) [2024] UKFTT 826 (TC) (12 September 2024)

Lowe v Revenue and Customs (INCOME TAX - discovery assessments for four tax years - issue relates to travel and subsistence expenses) [2024] UKFTT 826 (TC) (12 September 2024)

HMRC failed to provide evidence that a valid discovery was made, as required by both the subjective and objective tests. There was insufficient evidence that the officer who issued the assessments had formed the necessary belief or that such belief was objectively reasonable. The assessments were therefore invalid and the appeal was allowed.

Citation
[2024] UKFTT 826 (TC)
Parties
Appellant: Julian Lowe; Respondents: The Commissioners for His Majesty's Revenue and Customs
Jurisdiction
United Kingdom
Judgment Date
12 September 2024
Procedural Posture
Income Tax Appeal / First Tier Tribunal (tax Chamber) Final Judgment
Outcome
Appeal allowed
Legal Topics
Income Tax, Discovery Assessments, Travel and Subsistence Expenses, Burden of Proof, Self Assessment, Carelessness in Tax Returns
Tax Law Income Tax Discovery Assessments Travel and Subsistence Expenses Burden of Proof Self Assessment Carelessness in Tax Returns

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Parties

Julian Lowe

Appellant

The Commissioners for His Majesty's Revenue and Customs

Respondents

Procedural Posture

Income Tax Appeal / First Tier Tribunal (tax Chamber) Final Judgment

Legal Issues

  1. 1 Whether HMRC made a valid discovery under section 29 TMA 1970 for the relevant tax years
  2. 2 Whether the subjective and objective tests for making a discovery assessment were satisfied
  3. 3 Whether the assessments were validly issued in time

Ratio Decidendi

HMRC failed to provide evidence that a valid discovery was made, as required by both the subjective and objective tests. There was insufficient evidence that the officer who issued the assessments had formed the necessary belief or that such belief was objectively reasonable. The assessments were therefore invalid and the appeal was allowed.

Court Disposition

Appeal allowed

Orders

  • The appeal is allowed; the discovery assessments for the four tax years are set aside.