In HMRC v Charlton, Corfield & another [2012] UKFTT 770 (TCC) HMRC tried to make a discovery assessment and was unstuck by a DOTAS scheme reference.

  • The taxpayer took part in a capital gains tax avoidance scheme that was later found not to work.
  • The scheme was given a DOTAS number by HMRC and the taxpayer included this, as required on his tax return.
  • HMRC received the return but failed to open an enquiry into it in time. 
  • HMRC made a discovery assessment, out of time and the taxpayer appealed.

The Upper Tax Tribunal ruled that the presence of a DOTAS scheme reference number on a return should be enough for an officer of HMRC to be reasonably expected to be aware of an insufficiency of tax. 

It followed that an assessment could not be made later under the discovery provisions.

Useful guides on this topic

How to appeal a decision of HMRC
Key steps in appealing a decision of HMRC.

How to appeal a tax penalty
Essential reading in cases were there are penalties too

Discovery assessment and time limits
How far HMRC can go back, what conditions must be met for a valid discovery

Penalties: Error in a return or document
How work out penalties for different forms of inaccuracies

DOTAS: Disclosure of Tax Avoidance Schemes
Rules for declaring use of tax schemes

External Link: HMRC v Charlton, Corfield & another [2012] UKFTT 770 (TCC)

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