HMRC was precluded from pursuing an alternative argument two weeks prior to a substantive appeal hearing about the validity of discovery assessments, which did not appear in HMRC’s original statement of case submitted some time earlier. 

The appellants participated in a Montpelier tax mitigation scheme. The scheme purportedly generated allowable trading losses, which the appellants included in their self-assessment returns for the tax year 2005/06. HM Revenue and Customs (HMRC) issued discovery assessments in relation to those returns on 24 February 2015. The validity of the discovery assessments depended on HMRC being able to bring them within the extended time limit of 20 years, and to do this they needed to establish there was a loss of tax which was brought about deliberately by the appellants or by a person acting on their behalf. <>