In Bella Figura Ltd V HMRC [2020] UKUT 120, the Upper Tribunal (UT) found that HMRC were out of time on two of the three discovery assessments and incorrectly issued one relating to a pension unauthorised payment charge.

The UT identified errors of law in an earlier decision of the First Tier Tribunal (FTT) surrounding the carelessness of the taxpayers and the omission of taking into account relevant considerations. As such the UT could either remit the case back to the FTT or re-make the decision.

HMRC took two steps in relation to the loan made from the pension fund.

The FTT case reviewed the assessments raised:

The FTT had found:

The UT found that the FTT:

The UT remade the FTT's decision so that:

(1) The assessments of the unauthorised payments charge and surcharge are set aside on the basis that they were made out of time.

(2) The scheme sanction charge stands as a valid assessment under Regulation 4 of the Regulations and is not set aside under s268 and s269 of FA 2004.

Useful topical guides and tips

Discovery Assessments
What is a Discovery Assessment? When can HMRC make a Discovery? What are the time limits for Discovery Assessment?

Grounds for appeal: Reasonable excuse (freeview)
What is a 'reasonable excuse' in terms of making an appeal against a tax penalty for late filing, late payment or error?

How to appeal a tax penalty
How to appeal a tax penalty. What are your rights of appeal if HM Revenue & Customs (HMRC) have assessed you for a tax penalty?

Pensions Unauthorised Payments
What is a pensions unauthorised payment? When does a tax charge arise? Who pays the charge?

Pensions: At a glance
Pensions are a 'tax-advantaged' method of saving funds for your retirement. This 'At a glance' guide provides you with the key contribution limits and savings allowances.

External links

Bella Figura Limited v HMRC [2020] UKUT 120 (TC)

Bella Figura Limited v HMRC [2018] TC06614