Mehrban – Discovery Assessments Invalid Due To Staleness

In Kashif Mehrban v HMRC [2021] UKFTT 53 (TC) the First-tier Tribunal (FTT) held that a three-year delay in issuing a 'discovery' assessment issued pursuant to section 29,Taxes Management Act 1970 (TMA), resulted in the discovery becoming 'stale', even though the delay had not been the result of HMRC inaction.

Background

Mr Mehrban (the Appellant) appealed against assessments that were issued to him by HMRC in respect of tax years 2002/03 to 2015/16, pursuant to section 29, TMA (the discovery assessments). 

The Appellant owned and ran a newsagent shop. Following visits to his business in 2013/14, HMRC concluded that he had under-declared profit from the business and investigated him under its Code of Practice 9 (COP 9) procedure. The Appellant was invited to enter a contractual disclosure facility under suspicion of fraud and on 7 November 2014 he made a statement that he had understated taxable profits.