DST63300 - Time Limits for Making a Discovery Assessment
When considering the time limit for making a Discovery Assessment there is no link between any compliance check period and the period of assessment. The link is with the date on which HMRC is making the assessment and the accounting period.
HMRC can make a discovery assessment:
- 4 years from the end of the AP in which the further liability to tax arises where the loss of tax is not due to careless or deliberate behaviour
- 6 years from the end of the AP in which the further liability to tax arises where the loss of tax is due to careless behaviour of the relevant person.
- 20 years from the end of the AP in which the further liability to tax arises where the loss of tax is due to deliberate behaviour of the relevant person.
A relevant person in this context has the same statutory meaning as per s46 FA 2020, which is any person who is a member of the group in the accounting period.
Example:
Group A files its DST return (through its responsible member) for the period ending 31 March 2021. After the compliance check window has closed new information becomes available that sheds more light on the return. A discovery assessment is appropriate as the new information shows a loss of tax for the period. A discovery assessment for this period can be made by 31 March 2025 if the error was not due to careless or deliberate behaviour (4 years), 31 March 2027 if due to careless behaviour of a relevant person (6 years) or 31 March 2041 if due to deliberate behaviour of a relevant person (20 years).