HM Revenue and Customs

5. Mr O tells us that in 2014 HMRC opened discovery assessments into tax years 2010 to 2011 and 2011 to 2012 to pursue ‘dry tax’. He says this resulted in charges of unpaid tax amounting to around £30,000.

6. Mr O challenged HMRC at the FTT in 2020, but said the FTT ruled in HMRC’s favour. He explains there have been developments since the FTT which he believes will impact upon its decision. They are: • HMRC wrongly opened discovery assessments into his taxes in 2014. Mr O said the HMRC officer who made the discovery of potential discrepancies in his tax accounts was not the same officer who then carried out the discovery assessments. Mr O said this is not in line with recent legal precedent set down in 2021 and 2024 by the supreme court • HMRC offered another group of taxpayers a settlement in 2021. This settlement agreed not to pursue dry tax. Mr O said HMRC’s decision to settle with one group of taxpayers, but not with him, is discriminatory and unfair.

7. Mr O would like us to consider whether these developments would ultimately serve to change the FTT’s decision.

8. He tells us he now has a tax bill of almost £30,000 and this is on income he never received. He wants HMRC to look again at its decision not to write off his tax bill.

9. In 2014 HMRC opened discovery assessments into Mr O’s tax years 2010 to 2011 and 2011 to 2012 in pursuit of ‘dry tax’.

10. HMRC opens a discovery assessment when it reasonably believes a taxpayer has underpaid tax. Dry tax refers to a tax liability that arises without the individual receiving any funds to cover the liability.

11. Mr O tells us he received no income as a result of the ‘tax efficient vehicle’ he entered into in 2008, but, due to ‘accounting entries’, this was enough for HMRC to calculate the tax he would have owed and to pursue him for this sum.

12. Mr O challenged HMRC’s decision to pursue the alleged unpaid tax through the FTT in 2020. We understand the FTT ruled in HMRC’s favour which meant it would pursue recovery of the unpaid tax.

15. By law, we cannot consider your concerns about HMRC reclaiming the tax it decided you had not paid.

16. This is because Section 5(2) of the PCA says we cannot investigate a complaint when a person has or had an alternative legal remedy available to them.

17. An alternative legal remedy is legal action which can consider the matters raised and achieve the outcomes that person is looking for.

18. In your case, we can see that you had a statutory route of appeal to a tribunal, which you appropriately exercised. This was the right route to follow for the concerns you had raised, which was that HMRC was asking you to pay the wrong amount of tax.

19. We can see the FTT heard your appeal in 2020. We understand the FTT ruled in HMRC’s favour which meant it agreed HMRC was correct to pursue the underpaid tax.

20. If a person has already resorted to a court or tribunal that could have provided the remedy they are looking for, in your case to reverse the decision of HMRC to recover the underpayment of tax, we are not able to consider those matters further.

21. We do not have any authority to revisit matters a tribunal or court has already considered, or to award remedies that they considered but decided not to award. These matters fall outside of our remit.

22. Your complaint focusses upon two developments which have occurred since the FTT gave its decision. Firstly, the high court gave a view on how HMRC should handle its discovery assessments. Secondly, HMRC agreed to settle with one group of taxpayers but not with you.

23. You believe the above developments represent new evidence and could serve to undermine the FTT’s decision. You wanted our view on this.

24. The FTT has already given its decision in this matter and if you have new evidence which you feel may challenge its decision, you will need to seek independent legal advice about what options remain open to you. This may provide some clarity about whether you can still bring a legal challenge against the FTT’s decision.

25. For the reasons set out above, our Office cannot consider whether these recent developments may impact upon the FTT’s decision.

26. We recognise you were very disappointed with the outcome of the FTT and feel recent developments may serve to change your situation. We hope we have clearly explained why we are not able to further consider this matter.

1. We have carefully considered Mr O’s complaint about HMRC. We appreciate this complaint is very important to Mr O.

2. We are unable to further consider Mr O’s complaint because he wants us to examine whether his evidence will change the First-tier Tribunal’s (FTT) decision.

3. Our Office does not have any authority to revisit matters a tribunal or court has already considered, or to award remedies that they considered but decided not to award.

Such matters fall outside of our remit.

4. For this reason, we have decided to take no further action in Mr O’s complaint. We recognise our decision will be disappointing to Mr O. We trust our statement clearly sets out our thinking and the reasons for our decision.