Discovery Assessments and COP 8

[linuxcat]

Hi

Can anyone clarify if a Discovery Assessment is an enquiry opened under a COP 8?

I'm trying to understand if those with a DA are in the firing line for an APN.

Thank you in advance.

[slatt]

I don't know if DA's are specifically within COP8, but yes, you can certainly expect an APN if you have a DA

[convict]

A discovery assessment and an enquiry are two different things. Both are caught by APNs.

[linuxcat]

For HMRC to issue an APN for a DA, would they need to have defeated a similar scheme at the FTT?.

[DonkeyRhubarb]

For HMRC to issue an APN for a DA, would they need to have defeated a similar scheme at the FTT?.

Not if the DA was for a DOTAS scheme.

[linuxcat]

OK so....

I have a DA which does not have a DOTAS number associated with it.

So in this case, until HMRC win a case at FTT they can not issue an APN, only a follower notice?


Sorry if this has been covered elsewhere its still an area of confusion for me and I just want to nail it once and for all!

[convict]

follower notices rely on cases. No case, no follower. An APN should by rights require a DOTAS number. There's confusion at the moment on what happens if your scheme does not have one but HMRC think it should.

Start by reading Finance Act 2014


For APNs specifically, the section is:

219Circumstances in which an accelerated payment notice may be given

(1)HMRC may give a notice (an “accelerated payment notice”) to a person (“P”) if Conditions A to C are met.
(2)Condition A is that—
(a)a tax enquiry is in progress into a return or claim made by P in relation to a relevant tax, or
(b)P has made a tax appeal (by notifying HMRC or otherwise) in relation to a relevant tax but that appeal has not yet been—
(i)determined by the tribunal or court to which it is addressed, or
(ii)abandoned or otherwise disposed of.
(3)Condition B is that the return or claim or, as the case may be, appeal is made on the basis that a particular tax advantage (“the asserted advantage”) results from particular arrangements (“the chosen arrangements”).
(4)Condition C is that one or more of the following requirements are met—
(a)HMRC has given (or, at the same time as giving the accelerated payment notice, gives) P a follower notice under Chapter 2—
(i)in relation to the same return or claim or, as the case may be, appeal, and
(ii)by reason of the same tax advantage and the chosen arrangements;
(b)the chosen arrangements are DOTAS arrangements;
(c)a GAAR counteraction notice has been given in relation to the asserted advantage or part of it and the chosen arrangements (or is so given at the same time as the accelerated payment notice) in a case where the stated opinion of at least two of the members of the sub-panel of the GAAR Advisory Panel which considered the matter under paragraph 10 of Schedule 43 to FA 2013 was as set out in paragraph 11(3)(b) of that Schedule (entering into tax arrangements not reasonable course of action etc).
(5)“DOTAS arrangements” means—
(a)notifiable arrangements to which HMRC has allocated a reference number under section 311 of FA 2004,
(b)notifiable arrangements implementing a notifiable proposal where HMRC has allocated a reference number under that section to the proposed notifiable arrangements, or
(c)arrangements in respect of which the promoter must provide prescribed information under section 312(2) of that Act by reason of the arrangements being substantially the same as notifiable arrangements within paragraph (a) or (b).
(6)But the notifiable arrangements within subsection (5) do not include arrangements in relation to which HMRC has given notice under section 312(6) of FA 2004 (notice that promoters not under duty imposed to notify client of reference number).
(7)“GAAR counteraction notice” means a notice under paragraph 12 of Schedule 43 to FA 2013 (notice of final decision to counteract under the general anti-abuse rule).

Point 5 is where the fun/ambiguity starts...

So going by recent events, expect to get one; remember its now "pay now, argue later". One should expect this to apply to the whole thing, not just the appeals process.

[linuxcat]

Thanks convict much appreciated.

[Rob79]

http://www.financeandtaxtribunals.go...16/TC04042.pdf

para 17 especially

[centurian]

Seems they could apply that argument to practically any scheme that fails in court.

After all, in order for the scheme to be in-effective, presumably HMRC will argue that a particular assertion on the part of promoter is untrue/incorrect/invalid - and if the judges agree with HMRC, then not only does the scheme fail overall, but it validates the use of a discovery assessment.

Doesn't this mean that discovery time limits are effectively ripped up, or am I overstating it.

It's FTTT, so it's not binding, right?