The appellant company was a jeweller and bullion dealer. It appealed to the First-tier Tribunal (FTT) against discovery assessments and closure notices made by HMRC for its accounting periods ended 31 January 2007 to 31 January 2014 inclusive. 

Between 2007 and 2012, the price of gold rose substantially. This resulted in a transformation in the company’s business. In its 2006 accounting period, turnover was around £3 million and it focused on selling jewellery to the public and shops. However, by the 2011 accounting period it had a turnover of over £140 million and its business consisted almost entirely of purchasing scrap gold for smelting. HMRC did not consider the company had provided sufficient evidence of expenditure that the company claimed to have incurred on the purchase of the gold.  

The FTT held (among other things): (1) For the 2011 accounting period, some expenditure had to be added back to