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HMRC internal manual

Compliance Handbook

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HM Revenue & Customs
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Assessing Time Limits: Extended time limits: 20-year time limit

An assessment to recover tax that has been under-assessed or under-declared, or over-repaid or wrongly credited, can be made within 20 years of the end of the relevant tax period, see CH51700, in several situations. These are as follows.

Deliberate behaviour
Failure to notify
Avoidance Schemes
Arrangements intended to bring about a loss of VAT

Deliberate behaviour

An assessment can be made as described at the top of this page if tax has been under-assessed or under-declared, or over-repaid or wrongly credited due to the deliberate, see CH53700, behaviour of

  • the person, see CH51600, or
  • a person acting on their behalf, see CH53200.

Failure to notify

In the Compliance Handbook ‘failure to notify’ means that a person has not complied with one of the relevant obligations listed in CH71300 on or before the appropriate date.

An assessment can be made as described at the top of this page if there has been a loss of tax and one of the following situations applies.

  • The person has failed to notify chargeability to income tax or capital gains tax, but see exception 1 below.
  • The person has failed to notify chargeability to corporation tax, but see exception 2 below.
  • The person has failed to notify liability to register for VAT, insurance premium tax, aggregate levy, climate change levy or landfill tax.
  • The person has deliberately failed to comply with an excise duty obligation under FA08/SCH41/PARA1, see CH71300.
  • A non-taxable person, see CH51700, has failed to notify HMRC for VAT purposes about the acquisition in the UK from another EU member state of

    • Goods subject to excise duty, or
    • A new means of transport

Exceptions

  1. For income tax and capital gains tax, where a person has failed to notify chargeability under TMA70/S7, the 20 year rule might not apply to 2008/09 or earlier. It only applies to those years if the loss of tax was due to the person’s negligent conduct or the negligent conduct of someone acting on their behalf.
  2. For corporation tax, where a company has failed to notify chargeability under FA98/SCH18/PARA2, the 20 year rule might not apply to accounting periods ending on or before 31 March 2010. It only applies to those periods if the loss of tax was due to the negligence of the company or that of someone acting on the company’s behalf.

Note that the time limit for failure to notify is 20 years

  • whether or not the failure was deliberate, see CH53900
  • but not for obligations to notify for excise duties.

Property not included in an account for IHT purposes

Where there has been a loss of tax because a property was not included in an account for IHT purposes, HMRC have 20 years from the date on which the chargeable transfer was made to start proceedings. If the failure was deliberate there is no time limit.

Avoidance Schemes

An assessment can be made as described at the top of this page if a loss of tax is attributable to an avoidance scheme and

  • the scheme was a notifiable arrangement or scheme, and
  • the person failed to disclose details to HMRC at the proper time.

More details are in CH54000.

Arrangements intended to bring about a loss of VAT

An assessment can be made as described at the top of this page if a loss of tax has occurred because a person has participated in a transaction that they know (or ought to have known from the facts) to be part of an arrangement intended to bring about a loss of VAT. More details are in CH54100.

You can find details of the time limits that apply for each type of assessment in the tables at CH56000+. You should check the appropriate table before making your assessment.

Before you make ETL assessments, they must be authorised by the appropriate authorising officer. ETL assessments must be authorised by the authorising for penalty assessments. This will normally be your manager, see CH407050.

FA08/SCH39/PARA9

FA09/SCH51/PARA4

FA09/SCH51/PARA29

FA09/SCH51/PARA35

FA09/SCH51/PARA40