Under TMA70/S50(7) the Commissioners have both the power and the
duty to increase a self- assessment or HMRC assessment on appeal
where it appears to them that it is inadequate (see Cain v
Schofield 34TC364). Similarly, they may increase the amounts
contained in a partnership statement if they consider them
insufficient.
The statute does not specify who has to show that the
assessment etc is inadequate. It follows that the onus of proving
that the assessment etc is inadequate must lie on the party who
asserts that inadequacy. Usually it will be HMRC who assert that an
assessment etc is inadequate. It will therefore be for you to show
that the assessment etc should be increased. You will also have to
produce evidence as to the amount by which the assessment etc needs
to be increased.
If appropriate and sufficient evidence for an increase is
adduced, the Commissioners increase the assessment. In
investigation cases, see also EM3309. The standard of proof is the
ordinary Civil Standard of `balance of probabilities'.
You may occasionally encounter the argument that HMRC has no
right to adduce evidence in support of a submission that an
assessment should be increased. This argument is based on dicta of
Lord Diplock in In re Vandervell's Trusts 46TC341 at page 373D.
However, Lord Diplock's dicta was specifically criticised in Knight
v CIR 49TC179 per Stamp LJ at page 212B- D. And in the case of
Glaxo Group Ltd and others v CIR (68TC166, page 26), Millet LJ
concluded that the consequences of Lord Diplock's interpretation
were too bizarre for Parliament to have intended them.
If, at a contested hearing, the Commissioners uphold an
appellant's submission that you are not entitled to argue for an
increase in an assessment and determine the appeal accordingly, you
should make a report to Central Policy: Tax Administration
Policy.
