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HMRC internal manual

Company Taxation Manual

Corporation Tax self-assessment (CTSA): Discovery determination: Limitations on making

You should not make a discovery determination if:

  • you are within the time limit for opening an enquiry into the return to which the discovery relates, and
  • an enquiry has not already been opened and closed.

Also, a discovery determination is only appropriate when no additional liability on the company arises for the accounting period because of the discovery. For example, you discover that the company has overstated losses carried forward or surrendered as group relief.

You must make a discovery assessment when a discovery leads to an additional tax liability on the company for that accounting period - see CTM95030.

A discovery determination that reduces losses, or other negative amounts:

  • available to the company for another period, or
  • surrendered to another company,

may result in the need for an amendment to the return for the other period or by the other company.

When the time allowed for making an amendment to that return has expired you will have to make a discovery assessment.

When the discovery reduces an amount available for surrender as group or consortium relief below the amount actually surrendered see CTM97070.

Notice of a discovery determination must be served on the company stating:

  • the date of issue, and
  • the time allowed for making an appeal against it.

After you have issued a discovery determination you cannot alter it except in accordance with the express provisions of the Taxes Acts.