Steven Hague v The Commissioners for HMRC
[2024] UKFTT 139 (TC)
James Scott v The Commissioners for HMRC
4 April 2023
[2023] UKFTT 360 (TC)
First-tier Tribunal
HMRC assessed Mr. Scott for unpaid taxes. He argued they were too late. The court decided HMRC had a longer time to assess offshore tax issues, and they were within that time limit, so Mr. Scott had to pay.
Key Facts
- •Discovery assessments raised by HMRC for tax years 2013-14 and 2014-15 against Mr. Scott.
- •No dispute on facts, HMRC's discovery, or Mr. Scott's non-careless behavior.
- •Appeal concerns time limits for assessments, interaction of general limits, offshore matter extensions, and 'requirement to correct' legislation.
- •Mr. Scott received interest-free loans from a trust, leading to an un-declared taxable benefit.
- •Mr. Scott made a disclosure under the worldwide disclosure facility in 2018.
- •HMRC raised assessments on 9 March 2021; appeals followed.
- •The appeal concerned whether the assessments were raised within the legally permissible timeframes.
Legal Principles
Standard time limits for discovery assessments (TMA 1970): 4 years (section 34), 6 years (careless - section 36(1)), 20 years (deliberate - section 36(1A)).
Taxes Management Act 1970
Extended time limits for offshore matters (Requirement to Correct): Extension to 5 April 2021 for offshore tax non-compliance if the last day for assessment (disregarding this paragraph) fell between 6 April 2017 and 4 April 2021.
Paragraph 26 of Schedule 18 to Finance (No.2) Act 2017
Extended time limit for offshore matters (12 years after year end): Applies to loss of income tax or capital gains tax involving offshore matters or transfers.
Section 36A of TMA 1970 (introduced by Finance Act 2019)
Commencement provision for Section 36A (FA 2019): applies to 2013-14 and subsequent years only with carelessness; otherwise applies to 2015-16 and subsequent years.
Section 80(5) of Finance Act 2019
Statutory interpretation: Purposive construction, considering legislative intent and avoiding redundancy.
WT Ramsay [1981] STC 174; Tower MCashback [2011] UKSC 19
Outcomes
Appeal dismissed; assessments were raised in time.
HMRC could rely on the extended time limit in paragraph 26 of Schedule 18 to Finance (No.2) Act 2017, despite section 36A's introduction. Section 80(5) of the Finance Act 2019 didn't render paragraph 26 redundant; it provided additional protection for taxpayers in certain circumstances. The assessments were within the extended timeframe provided by paragraph 26.