Hunter v Revenue & Customs (INCOME TAX :Discovery Assessment) [2019] UKFTT 312 (TC) (14 May 2019)

Hunter v Revenue & Customs (INCOME TAX :Discovery Assessment) [2019] UKFTT 312 (TC) (14 May 2019)

The Tribunal found that HMRC had made a valid discovery of undeclared income, that the discovery was not stale and was made within the statutory time limit due to the Appellant’s carelessness in failing to keep adequate records, and that the Appellant failed to discharge the burden of proving the credits were not taxable. The informal compliance check was lawful and there was no evidence of coercion or false pretences by HMRC.

Citation
[2019] UKFTT 312 (TC)
Parties
Appellant: Keith Hunter; Respondents: The Commissioners for Her Majesty’s Revenue & Customs
Jurisdiction
United Kingdom
Judgment Date
14 May 2019
Procedural Posture
Income Tax Appeal (discovery Assessment) / First Tier Tribunal (tax Chamber) Substantive Decision
Outcome
Appeal dismissed
Legal Topics
Discovery Assessment, Income Tax, Carelessness, Record Keeping, Time Limits for Assessment, Lawfulness of HMRC Investigations, Burden of Proof
Tax Law Discovery Assessment Income Tax Carelessness Record Keeping Time Limits for Assessment Lawfulness of HMRC Investigations Burden of Proof

Case Brief

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Parties

Keith Hunter

Appellant

The Commissioners for Her Majesty’s Revenue & Customs

Respondents

Procedural Posture

Income Tax Appeal (discovery Assessment) / First Tier Tribunal (tax Chamber) Substantive Decision

Legal Issues

  1. 1 Whether HMRC validly made a discovery under section 29(1) TMA 1970
  2. 2 Whether the discovery was stale or made within the statutory time limit
  3. 3 Whether any tax loss was brought about by the Appellant’s carelessness

Ratio Decidendi

The Tribunal found that HMRC had made a valid discovery of undeclared income, that the discovery was not stale and was made within the statutory time limit due to the Appellant’s carelessness in failing to keep adequate records, and that the Appellant failed to discharge the burden of proving the credits were not taxable. The informal compliance check was lawful and there was no evidence of coercion or false pretences by HMRC.

Court Disposition

Appeal dismissed

Orders

  • Discovery Assessment upheld in the reduced sum of £36,225.62 for the 2011-12 tax year
  • No penalty assessment issued or considered in this appeal