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HMRC internal manual

Enquiry Manual

Reopening Earlier Years: Tax Cases: Nicholson v Morris 51TC95

In this case there were numerous omissions from the set of accounts which had been investigated and the taxpayer, Mr Nicholson gave no evidence concerning these. Mr Nicholson argued that the Rosette Franks case was very different to his own because in it the taxpayer had actually been caught out in a false transaction. However the judge did not agree with that, saying,

in my view the present case is much stronger because of the many years of unexplained under-disclosures


it is hopeless to suggest that there was not ample evidence to support the finding that there was fraud or wilful default at least in some of the years


cried out for explanation and yet Mr Nicholson elected to give no evidence.

The Judge held that

although there was no direct evidence to show non-disclosure in earlier years, the Commissioners were fully entitled to draw the inference that this was ….a continuing course of conduct … which had begun earlier and persisted throughout the years in question.