Analysis – First-Tier Tax Tribunal: Burden of proof

Speed Read: For any discovery assessment raised outside the new four-year time limit, the burden of proof is on HMRC to show that there is a loss of tax which is attributable to 'careless' or 'deliberate' conduct. If the appeal turns on a dispute as to the interpretation or application of the law, the burden remains on HMRC, and does not shift to the taxpayer. The new time limits are welcome, but careless clients should still be wary. HMRC will be quick to allege 'deliberate' errors in order to raise assessments past the new six-year deadline for 'careless' conduct; and quick to adduce prejudicial evidence against the taxpayer in order to persuade the tribunal that on the balance of probabilities he (or his adviser) should not be believed when he says he had no knowledge of the error.