In Ruhal Islam v HMRC [2022] TC08513, the First Tier Tribunal (FTT) upheld the appeal against discovery assessments imposing almost £300,000 in tax. It was on the basis that the till receipts that formed the assessment, using the presumption of continuity, were actually fabricated to increase the value of the business for a potential sale.

The FTT found that neither party was able to prove their case and that it was, overall, an unsatisfactory hearing. 

For the purposes of the appeal, the burden of proof was on HMRC to prove that there was a loss of tax due to deliberate or careless behaviour and the FTT found:

The appeal was allowed.

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?

Closure Notices
When does HMRC issue a Closure Notice? Can a taxpayer demand one? Are there appeal rights? 

External link

Ruhal Islam v HMRC [2022] TC08513


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