Discovery Assessments

The definitive guide to the discovery assessment rules, which allow HMRC to raise an assessment up to 20 years after the end of the relevant tax year, vastly extending the normal four-year time limit (or six-year limit where there has been careless conduct). 

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About this work

As cutbacks at HMRC mean that fewer enquiries are being pursued, HMRC are increasingly relying on their powers to make discovery assessments. Frequently, however, HMRC overlook (and often fail even to mention) the statutory safeguards that are intended to protect taxpayers from challenges outside a formal self-assessment enquiry. It is only with a clear guide to the extent of HMRC’s powers that advisers can ensure that they protect their clients from inappropriate challenges.

The rules have been subject to considerable scrutiny by the tax tribunals, and the author of this title has been involved in many of the leading cases. His work provides tax advisers with a clear and comprehensive guide to the rules concerning discovery assessments and contains much practical advice explaining when and how such assessments may be challenged.

“An essential guide for any practitioner acting in cases involving discovery assessments, both scholarly and practical.” – TAXline review of first edition

Table of contents

• Statement of Practice 1 (2006) – annotated

• • Introduction to discovery assessments

• • The meaning of “discover” [expanded by way of example]
    • Introduction
    • Who must make the discovery
    • What is a discovery? [expanded by way of example]
      • What must be discovered?
      • “Tax that ought to have been assessed”
      • The moment of discovery – crossing a threshold
      • Facts and laws may be discovered
      • Something “new”
      • What level of knowledge constitutes a discovery?
      • Theoretical difficulties with the meaning of “discover”
      • Situations that might constitute a discovery
      • “Protective assessments”
      • Supporting an asserted discovery
      • Capital statements
      • Presumption of continuity
      • Business economics exercises
      • Actions of other taxpayers
      • Mismatch of information
    • Making of rediscoveries
    • Timing of a discovery
    • Other taxes
    • Other discovery provisions
    • Discoveries and standalone tax charges
    • • Staleness

• • Additional safeguards when a tax return has been made

• • Careless or deliberate conduct

• • Insufficiency of disclosure

• • Defences against a discovery assessment

• • Time limits

• • Procedural matters

• • Consequential claims by taxpayers

• • Interaction with investigatory powers

• • Statement of Practice 8 (1991) – annotated

• Statement of Practice 1 (2006) – annotated