OK so he "felt that"--- if that was his words then clearly he has nothing more than a feeling and that does not amount to a discovery that tax has been unpaid. Clearly the onus will be on him - without any further evidence to show that he has in fact discovered that tax has been underpaid and that the assessment if he is brave enough to make it is to the best of his judgement and ability. He is a crafty beggar as he relates the comparison to the year he has just enquired into and says that he feels that it is excessive. Turn that on its head and if it seemed excessive to the earlier years also then clearly there was no discovery after the window closed. In other words if it looked excessive in relation to earlier years then they had their opportunity during the enquiry window to open the enquiry and if they did not do it they are statute barred.
A wee bit tricky with HMRC using the later years comparison but maybe you could suggest that the enquiry year was only opened to get back into the earlier year if they have truly found lttle in the current year. Youcould of course ask them to dissuade you from that belief by providing their risk assessment for the case as it appeared for the enqiry year. I know this is grasping at hypothesis and you should never ask a question you don't know the answer to when you are heading for or before the Commissioners however it seems that the inspector is equally grasping at straws as he relates the excessiveness of the previous year claim to his findings in the enquiry year. If he found nothing wrong with the same expenses claim in the enquiry year why is he taking an opposite view of a PAST claim. Looks like a bit of prejudice there as I would have had more doubts in your stance - and less in his - if he had found the enquiry year vehicle expenses to be incorrect and it was on that basis he was seeking to open now closed years.
You do not give a figure for the subject of vehicle expenses in the "discovery year" but I assume that it is in excess of £50K to avoid being accused of dealing in trivia. I assume that the officer has been made aware of the HMRC enquiry policy that matters of enquiry should be meaningful in amounts and if a case is weak it should be dropped (or some similar sentiments)
regards
bill@wamstaxltd.com
http://www.wamstaxltd.comregards and hope this helps
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