In Shaun McCumiskey v HMRC [2022] TC08459, the First Tier Tribunal (FTT) upheld the appeal against a discovery assessment regarding a fraudulent SEIS claim made by a sub-agent, deciding that as the appellant had not authorised the sub-agent, they were not acting on his behalf, and as such the discovery conditions were not met.

  • Mr McCumisky had started to trade as an electrician and needed to file a Self Assessment tax return.
  • He appointed Alpha Tax Consultants Limited (Alpha) as his agent, completing the necessary Form 64-8.
  • His return was submitted by Capital Allowance Consultants Limited (Capital), apparently as a delegated agent, and included a fraudulent Seed Enterprise Investment Scheme (SEIS) claim. The resulting tax refund was paid into a nominee account of Capital.
  • When HMRC discovered that the claim was fraudulent, they issued a Discovery Assessment for the loss of tax.
  • Mr McCumiskey informed HMRC he had made no such investment, did not know what SEIS was and was not aware of any claim. As far as he was concerned his tax return had been dealt with by Alpha.

The FTT considered the issue of the delegation of agent status:

  • The Form 64-8 does not expressly allow the delegation of duties or the appointment of a sub-agent.
  • The legal position for agents is that where completing an action involving confidences, e.g. the completion of a tax return, such delegation or appointment can only be done with the express or implied authorisation of the taxpayer.
  • As such, Capital was not acting on Mr McCumisky's behalf and the tax return filed was not his because of this.
  • Without the filing of a valid tax return the conditions of discovery could not be met.

The FTT also noted that HMRC did have sufficient information within the return to doubt the validity of the SEIS claim based on stated earnings and such a large and risky investment.

The appeal was allowed in full.

Useful guides on this topic

Self-employment: Registering for Tax 
You are self-employed, you have started working for yourself, what do you need to do to now? How to register for tax.

SEIS: Seed Enterprise Investment Scheme
When can SEIS relief be claimed?  What are the conditions for SEIS relief?  What are the benefits of SEIS relief?

Discovery Assessments
When can HMRC issue an assessment outside of the normal statutory time limits? What conditions must be met? What are your rights of appeal and defences?

External link

Shaun McCumiskey v HMRC [2022] TC08459

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