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HMRC internal manual

Enquiry Manual

HM Revenue & Customs
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Working the enquiry: reviewing earlier years: protective assessments

Assessments that are made shortly before a time limit expires are commonly called `protective assessments’. They are intended to protect HMRC’s position by keeping the matter open until enquiries are completed.

The conditions for making protective assessments are set out in EM3250+.

You must estimate the amount of the assessment to the best of your ability, having regard to all the available facts.

You must not make an assessment on a concealed source of income, even for a current year

  • without the approval of a Grade 6, and
  • until an enquiry is formally opened in a case where

    • the taxpayer or their spouse, civil partner or domestic partner is a director of a company, or
    • the taxpayer or their spouse, civil partner or domestic partner is connected with any trade or profession as proprietor or a partner in a partnership.

If you issue an assessment prematurely, this may as a consequence disclose our knowledge of a concealed source. The taxpayer then, when eventually challenged, might limit their disclosure to matters directly connected with that source.

It may be necessary to establish before the tribunal that an assessment was made for the purpose of making good a loss of tax or NIC arising from the taxpayer’s or their agent’s specific behaviour. See EM3346 for an explanation of what this means.

Where doubt or difficulty arises seek advice from contact link.