HMRC claimed that Tooth owed them unpaid taxes from the tax year 2007-8, relying on section 29 of the Taxes Management Act 1970 allowing the tax authority to make a discovery assessment where a past tax assessment was discovered to be insufficient.

The respondent challenged HMRC’s ability to do so on the basis that he had not deliberately understated his tax liability and the Supreme Court refused this appeal made by HMRC as there was no inaccuracy in the return submitted to HMRC.

In 2009, Tooth had been a participant in the Romangate tax avoidance scheme, which he used to generate an employment-related loss he could use to offset his tax liability.