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HMRC internal manual

Enquiry Manual

Reopening Earlier Years: Discovery in SA Years: Outline


FA98/SCH18/PARA 41

If your investigation is proceeding on the basis of discovery and you expect to reach a contract settlement with the taxpayer you may not need to make discovery assessments. (But see EM3341 on protective assessments.)

You will need to make discovery assessments where you are unable to reach agreement with the taxpayer on the amount of additional tax liabilities. This would include making estimated assessments when you are uncertain of the actual amount of the additional tax and the taxpayer is unwilling to provide information you need to establish the correct figure. You may make a discovery assessment for a tax year or chargeable period if it is discovered EM3306 that

  • there is tax which ought to have been assessed but has not been assessed, or
  • an assessment is or has become insufficient, or
  • any relief that has been given is or has become excessive


  • the return was not made in accordance with prevailing practice EM3255 
  • one of two conditions are fulfilled EM3255
  • operational restrictions are followed EM3265 
  • you are within time limits EM3270.

You should make the assessment in the amount (or the further amount) which you believe will make good to the Crown the loss of tax.

A discovery assessment may also be made under TMA70/S30(1B) to recover any repayment of tax that should not have been made.

The normal appeals procedures apply to appeals against discovery assessments, see ARTG2120+.