ARTICLE · 17 AUGUST 2011

Weekly Tax Update - Monday 08 August 2011

Smith & Williamson

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The First-Tier Tax Tribunal has considered the case of Dr Michael Charlton and Others (TC01317) and helpfully clarified the implications of the decision in the Veltema case. However the Veltema decision has been heavily relied on by HMRC and so this case may well be appealed.

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Richard Mannion

1. GENERAL NEWS

1.1. Discovery assessments – conditions to be met

The First-Tier Tax Tribunal has considered the case of Dr Michael Charlton and Others (TC01317) and helpfully clarified the implications of the decision in the Veltema case. However the Veltema decision has been heavily relied on by HMRC and so this case may well be appealed.

In this case a number of clients of a firm of accountants had participated in a tax avoidance scheme. It appeared that all individuals had made detailed disclosures in their tax returns about the scheme and had shown the DOTAS scheme reference number. In the majority of cases HMRC commenced enquiry proceedings before the deadline. However in 3 cases, including Mr Charlton, they failed to do so. On discovering the oversight later HMRC sought to raise discovery assessments on the grounds that whilst the returns included factual details of the scheme they did not flag up that there was an actual insufficiency in the return which

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