Going stale

Key points

• Does a long delay between a discovery and assessment mean that tax cannot be recovered?
• HMRC were aware of an avoidance scheme declared by the taxpayer.
• A review of previous tribunal and court decisions.
• The concept of staleness is relevant to the principles governing discovery.
• It is not possible to make the same discovery twice for the same reasons.
• Taxpayers cannot be left in an indefinite state of uncertainty on whether HMRC will issue a discovery assessment.

In the recent case of Clive Beagles v HMRC [2018] UKUT 380 (TCC) the Upper Tribunal held that a delay of nearly two and a half years between first HMRC discovering that a taxpayer’s self-assessment tax return was insufficient and second the issue of an assessment was too long. Consequently because the discovery had become ‘stale’ by the time of the assessment the assessment was invalid. This decision is...