In HMRC v Bashir Ahmed Jafari [2022] UT00119, the Upper Tribunal (UT) found the First Tier Tribunal (FTT) had wrongly interpreted the taxpayer's wish to withdraw his evidence. The UT remade the decision to reflect that the taxpayer had withdrawn his appeal in its’ entirety and upheld HMRC's assessments.

  • Mr Jafari appealed to the FTT against various decisions that HMRC had made in respect of his tax affairs which included a Discovery Assessment for 2009/10.
  • During the FTT proceedings, Mr Jafari stated he wished to withdraw his evidence and submissions.
  • Despite this statement, the FTT went on to allow his appeal against the discovery assessment on the basis that the discovery was stale.
  • Following the decision in HMRC v Tooth [2021] UKSC 17 (Tooth), the concept of Staleness was refined and discovery assessments cannot cease to qualify as valid due to the passage of time.
  • Once Tooth had been decided, HMRC contacted Mr Jafari to ask him to state the grounds of his appeal.
  • Other than confirming his desire to appeal, no grounds of appeal were presented by Mr Jafari.
  • HMRC issued an 'Unless Direction' which required Mr Jafari to provide grounds of his appeal and stating that failure to comply could result in him being debarred from defending the appeal.
  • No such grounds were forthcoming.

The UT subsequently debarred the taxpayer and went on to allow HMRC's appeal finding that:

  • The FTT was wrong to consider that the ‘discovery’ on which HMRC relied had become stale.
  • The FTT had misconstrued Mr Jafari’s statement that he wished to withdraw all his evidence and submissions.  
  • The correct construction of Mr Jafari’s statement was that the FTT should have taken Mr Jafari's appeal as withdrawn in its entirety. The UT remade the decision accordingly.

Useful guides on this topic

Tooth: Discovery basic condition not met
In HMRC v Raymond Tooth [2021] UKSC 17, the Supreme Court ruled on two important issues in relation to HMRC's powers in making Discovery Assessments. Entering the correct figures in the wrong boxes of a tax return because there is nowhere else in the return to put them and to then make a full disclosure of that fact, cannot be construed as a deliberate error and the concept of 'staleness' in respect of assessments has a very narrow application.

Discovery Assessments: At a glance (freeview)
This is a freeview 'At a glance' guide to Discovery Assessments.

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?

How to appeal an HMRC decision
Disagree with an HMRC decision? How to appeal, what type of decision can you appeal and what are your different options when you disagree with HMRC? What are the key steps in making an appeal?

External links

HMRC v Bashir Ahmed Jafari [2022] UT00119 the

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