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HMRC internal manual

Debt Management and Banking Manual

Interest: Interest Review Unit (IRU): Income Tax Self Assessment (ITSA): HMRC assessments on the SA system

HMRC’s powers to make a Discovery Assessment will generally be used either:

  • after the period for opening an enquiry into an SA return has passed or
  • after an enquiry into that year’s SA return has been closed.

Subject to the conditions in ‘S29 TMA 1970’, a Discovery Assessment can be made for a tax year to recover a loss of tax where either:

  • there are profits which should have been assessed but have not been
  • an assessment (including a self assessment) is now not enough or
  • any relief that has been given is now too much.

A Discovery Assessment may not be made in the following circumstances.

  • The return was made in line with the practice used at that time, even if we then change our practice in relation to a particular item and a resulting loss of tax arises; or
  • The enquiry window has closed or the enquiry has ended and the information allowing the discovery was made available before this.

More on these circumstances can be found in SAM under ‘Assessments - Assessments within SA’ (SAM20000). The due dates for assessments are in SAM under ‘Assessments - Relevant dates for section 86 TMA 1970 and section 101 FA 2009 interest purposes’ and as long as the local office follows the instructions, the due date should be correct. Please see the advice given in DMBM405290 if the relevant date of an assessment is wrong.