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Paul Brown v CIR: discussing collective knowledge

Collective knowledge

Key points

  • TMA 1970 s 29 remains the key enactment for HMRC to make a discovery but it does not give it an open-ended power to raise an assessment.
  • Taxpayers are protected by the time limits given in TMA 1970 s 34 and s 36 for a valid assessment to be raised.
  • The Supreme Court in CRC v Tooth helped to clarify a number of issues – this article focuses on the issue of ‘collective knowledge’.
  • The high income child benefit charge legislation was introduced without anybody considering whether s 29 needed to be revised to include the new charge.
  • All too often an HMRC inspector will open an enquiry to obtain confirmation of a charge that they already know about and then penalise the taxpayer.
  • HMRC has decided not to appeal the First-tier Tribunal’s decision in Paul Brown.

The concept of discovery has been...

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