The Supreme Court has given their decision in Tooth and we're not sure if the correct way to describe it is "as you were", "score draw" or "sanity reigns".

The point won for the taxpayer (and for everyone else too) is that to start the 20-year clock for discovery the deliberate action has to be designed to mislead the Revenue and not just to make a deliberate entry on the tax return (i.e., as with penalties). Also, it is necessary to read the tax return in its entirety and not just a particular entry to see if it was inaccurate. This is how "deliberate" was understood to work before Tooth.

Then for HMRC, although it is dicta, the Supreme Court threw out the idea that a discovery could become "stale". This is also how our Andrew Parkes understood discovery to work when he was at HMRC. An Inspector had the time limit to make the assessment and his discovery had to be within that time limit. It didn't matter when within the time limit, he made the discovery - that was how enquiries worked. In many instances HMRC would be trying to negotiate a contract settlement and it was only when negotiations had irretrievably broken down would a discovery assessment be made (or when the discovery time limit was approaching!).

So, a score draw, both sides had what appeared whacky ideas to the other side thrown out or the clock was moved back to what was understood before all of this started.

Originally published June 2021

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