During the course of proceedings, either the court or the defender (or the defender’s representative) may suggest that an estimated assessment is excessive and HMRC should have regard to the “equitable liability”. That is, the amount that would have been charged had the necessary information (accounts etc) been made available at the proper time.
The strict legal position is that because the assessment is final and conclusive, there is no entitlement to an adjustment but, in practice, HMRC is reluctant to pursue recovery where there are reasonable grounds for thinking that the liability would have been less.
Although this is the case, you must never express an opinion on the amount of an assessment, say anything which might imply that part of the tax/NIC is not due or use the term “equitable liability” in correspondence or conversation (other than within the Department).
If you are asked to consider equitable liability inform the defender that you will be seeking decree for the full amount. However should decree be granted you will refer the matter to the Commissioners for HMRC for consideration, without prejudice to the Department’s right to recover the sums contained in the decree.
You should immediately