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HMRC internal manual

Enquiry Manual

Reopening Earlier Years: Assessments: Purpose

There are circumstances when you will need to establish before the tribunal that an assessment was made for the purpose of making good a loss of tax or NIC arising from the taxpayer’s or their agent’s specific behaviour.

We consider that the test of purpose for making an assessment is an objective one. This follows the decision in Thurgood v Slarke, 47TC130 (and see also Hudson V Humbles, 42TC380). This test only requires you to prove that

  • there has in fact been a loss of tax or NIC due to failure or deliberate or careless behaviour (or fraudulent or negligent conduct for periods before 1 April 2010), and
  • an assessment has been made that makes good the loss or tax.

It is not necessary to be able to demonstrate that the assessment was for the express purpose of making good the loss of tax.

This applies throughout the United Kingdom, not withstanding the decision in J O’Mullen & Co v Walmsley, 42TC573 in the High Court in Northern Ireland. The decision in this case was that the test is subjective and that we must show that the enquiry officer who made the assessment actually did so for the express purpose of making good the loss. In any such proceedings, anywhere in the United Kingdom, ‘purpose’ should therefore be established by reference to the decision in Thurgood v Slarke.

It is not necessary for particulars of the alleged offence to be given at the outset. It will be sufficient if it appears from the opening of the case or from the evidence as it emerges (see Regina v Special Commissioners and HM Inspector of Taxes for Stratford, ex parte Martin, 48TC1).