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
