Beta This part of GOV.UK is being rebuilt – find out what beta means

HMRC internal manual

Compliance Handbook

Assessing Time Limits: Extended time limits: Failure to disclose a notifiable avoidance arrangement, a listed or hallmarked scheme

Subject to the tax specific points below, the 20-year time limit applies where a loss of tax is attributable to an avoidance scheme which is

  • a notifiable arrangement, or
  • a listed or hallmarked scheme, and

the user of the scheme failed to disclose details to HMRC at the proper time.

The tax avoidance scheme disclosure regime for income tax, capital gains tax and corporation tax and the disclosure of avoidance schemes regime for VAT require people to notify HMRC when they have used certain types of schemes.

A person is required to

  • disclose details of the arrangement or scheme, or
  • notify in their return that they have used a scheme that has been disclosed by a promoter, and supply the reference number HMRC issued to the promoter, or
  • notify HMRC in the prescribed manner and time limits if they have used a designated scheme.

If a person fails to make the required disclosure or to notify the use of a registered scheme, we may, subject to the points below, assess relevant tax periods ending not more than 20 years ago to recover any loss of tax attributable to the use of the scheme.

Income tax, capital gains tax, corporation tax

For assessments made on or after 1 April 2010, the 20-year time limit for assessing tax applies where there has been a loss of tax attributable to an avoidance arrangement where the person has failed to make an appropriate disclosure. See CH53600 for details.

However, under transitional provisions, the 20-year time limit to make an assessment does not apply

  • for income tax and capital gains tax to 2008-09 and earlier years. See CH56100 for details
  • for corporation tax to accounting periods ended on or before 31 March 2010. See CH56200 for details.

The 20-year extended time limit only applies to earlier tax years and accounting periods where the assessment is to make good a loss of tax attributable to negligent conduct of the taxpayer or a person acting on the taxpayer’s behalf.

SI2009/403 Article 7 

VAT

The 20-year time limit for assessing tax applies in all cases where there has been a loss of VAT due to a failure to make an appropriate disclosure.

There are transitional provisions that apply where you use the 20-year time limit to make an assessment for a relevant tax period ending on or before 31 March 2010. See CH51530 for details.

All VAT tax assessments made more than 2 years after the end of the prescribed accounting period are subject to the 12 months evidence of facts rule, see CH51820.