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HMRC internal manual

Company Taxation Manual

From
HM Revenue & Customs
Updated
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Corporation Tax self-assessment (CTSA): Assessments: Discovery - restrictions on the power to make

FA98/SCH18/PARA42 - 45

There are restrictions on making discovery assessments. You can only make a discovery assessment for an accounting period for which a company has delivered a company tax return if Paragraphs 43 or 44 apply.

  1. Paragraph 43 says that when a company has delivered a company tax return you can make a discovery assessment if the discovery made is attributable to fraudulent or negligent conduct on the part of:
    1. the company,
    2. a person acting on behalf of the company, or
    3. a person who was a partner of the company at the relevant time.
       
  2. Paragraph 44 says that you can make a discovery assessment for an accounting period for which the company has delivered a company tax return when you:
  • are out of time for opening an enquiry into the return,

or

  • have completed your enquiries into the return,

and

  • you could not have been reasonably expected, on the basis of the information available to you before that time, to be aware of the matters discovered - see CTM95080.

Note: Paragraph 42 (2) removes these restrictions when you make a discovery assessment that only gives effect to a discovery determination made in relation to an amount stated in another company’s tax return.