Mark McLaughlin looks at HMRC discovery assessments issued on an alternative basis.
Some years ago, there was a sketch on the satirical television show Spitting Image about a former Prime
Minister (who shall remain nameless) who was known for his indecisiveness. Members of his Cabinet tried to
improve his decision-making skills by inviting him to make a simple choice between having a cup of tea or a
cup of coffee. The Prime Minister agonized in his deliberations, sweating profusely. Eventually, after much
coaxing, the Cabinet triumphantly celebrated when the Prime Minister finally declared: “I’ll have tea”, before
sending them into despair by adding: “…with some coffee in it”.
The indecisiveness of the Prime Minister in the Spitting Image sketch is sometimes replicated by HMRC
when it comes to issuing discovery assessments. This can happen if a transaction is capable of being
interpreted in different ways for tax purposes, with a different tax treatment applying to each.
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