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HMRC internal manual

Enquiry Manual

Reopening Earlier Years: Discovery in Pre-SA Years: Assessment under Appeal

The guidance below applies to income tax and CGT assessments for pre-SA periods only.

It was held in Duchy Maternity Ltd v Hodgson (59TC85) that TMA70/S29 permitted an Inspector to make a further assessment even though the main assessment was still under appeal and could have been increased under TMA70/S50 (7).

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

Under the pre-SA rules, a main assessment carried interest under TMA70/S86 (old) on any additional tax brought into charge. This may well amount to little less than might be charged under Section 88 on the further assessment. If the further assessment was subsequently found not to have been made for the requisite purpose, the total interest charge could be reduced substantially by the making of the further assessment.

For SA years, a Section 9C jeopardy amendment EM1950 is the relevant approach for years where there is an open Section 9A enquiry.

You should bear in mind the possibility of applying the Duchy Maternity decision in any enquiry case in which there is a substantially inadequate assessment under appeal and you consider that the interests of the Revenue would be protected or advanced by the making of a further assessment, normally because you are unable to obtain a satisfactory payment on account.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

You should, in such a case, seek advice from contact link before expressing any view to the taxpayer or his agent of the possibility of making a further assessment.