CSOH 137 (2009) Pattullo v HMRC

Judicial review, discovery, information powers and tax avoidance - HMRC won

Case Summary:

Mr Pattullo submitted a tax return with white space entries saying he had made an allowable capital loss on capital redemption contracts. After the enquiry window closed HMRC sought information under S20 TMA 1970 and a Commissioner granted authority. Judicial Review was sought of that decision on the grounds that as HMRC would not be able to issue a discovery assessment no information should be supplied.

Lord Bannatyne rejected these arguments and approved the interpretation of discovery by the Special Commissioner in the case of Corbally Stourton. For HMRC to be prevented from making a discovery there had to be a clear alerting of an officer within the white space, that officer being one of ordinary knowledge and skill, of the participation by the taxpayer in a scheme of tax avoidance and of an insufficiency in tax arising therefrom.