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In Stuart A Cormack v HMRC [2021] TC08289, the First Tier Tribunal (FTT) struck out the appeal in part, finding that SEIS and EIS had been incorrectly claimed but in light of alleged agent fraud, HMRC had failed to prove that the discovery assessments issued were valid.

The FTT found that it did not have jurisdiction to consider public law concepts within the boundaries of the appeal's circumstances and so could not make a ruling based on who was responsible for the incorrect returns or the behaviour of HMRC in relation to dishonest tax agents.

It was only able to decide whether the claims were valid or not and they were not. On those grounds, the appeal was struck out.

The court then considered whether the discovery assessments were valid and found:

On these grounds, the FTT found that as the burden of proof lay with HMRC. It had not been met and the assessments were not valid.

Useful guides on this topic

Discovery Assessments
When can HMRC issue an assessment outside of the normal statutory time limits? What conditions must be met? What are your rights of appeal and defences?

Client guide: Reasonable care and tax penalties
What triggers a tax penalty? What standard of care is expected from a taxpayer? What is reasonable care? When is an error careless?

External link

Stuart A Cormack v HMRC [2021] TC08289


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