MTT55370 - Administration: Compliance: Discovery assessments and HMRC determinations: Supersession by self-assessment

An HMRC determination will be superseded by a self-assessment return for the relevant accounting period, as long as an information return or overseas return notification has also been submitted to HMRC.

The determination is superseded when the return is submitted.

See MTT52010 for further guidance on information returns, and MTT53010 for further guidance on self-assessment returns.

This is set out in paragraph 26, schedule 14 to Finance (No.2) Act 2023.

Time limits

A self-assessment return will not supersede a determination if it is made later than both:

  • 3 years after the day on which the power to make the determination first became exercisable, and
  • 12 months after the date of the determination.

Examples

The following example, with different scenarios, demonstrates how and when a determination is superseded by a self-assessment return.

Example

Group A makes up its consolidated accounts to 31 December annually.

The filing date for its self-assessment return for APE 31 Dec 2032 is 31 March 2034.

1 April 2035 is the day on which the power to make the HMRC determination first becomes exercisable.

HMRC has reasonable grounds to believe the filing member is obliged to submit a self-assessment return for the accounting period.

Scenario 1

HMRC makes a determination for that period on 10 July 2035.

The filing member submits a return in February 2036.

The self-assessment supersedes the HMRC determination, because:

    • it is within 12 months of the date of the HMRC determination, and
    • it is also within 3 years of the day on which the power to make the determination first became exercisable

Scenario 2

HMRC makes a determination for that period on 10 July 2035.

The filing member submits a return in October 2036.

The self-assessment supersedes the HMRC determination, because:

    • it is within 3 years of the day on which the power to make the determination first became exercisable,
    • even though it is more than 12 months after the date of the HMRC determination

Scenario 3

HMRC makes a determination for that period on 10 March 2037.

The filing member submits a return in August 2037.

The self-assessment supersedes the HMRC determination, because:

    • it is within 12 months of the date of the HMRC determination,
    • even though it is more than 3 years after the day on which the power to make the determination first became exercisable

Scenario 4

HMRC makes a determination for that period on 10 March 2037.

The filing member submits a return in August 2038.

The self-assessment does not supersede the HMRC determination, because:

    • it is more than 12 months after the date of the HMRC determination, and
    • it is also more than 3 years after the day on which the power to make the determination first became exercisable.

Proceedings to recover tax

If proceedings to recover tax assessed in an HMRC determination are underway, and a self-assessment return is submitted which supersedes the determination, the proceedings may continue as if they were proceedings for the recovery of the self-assessed amount (insofar as the self-assessed amount is due and payable and has not been paid).

Action undertaken to enforce deduction from accounts

If action is being taken under Schedule 8 Part 1 of the Finance (No. 2) Act 2015 to recover tax assessed in an HMRC determination, and a self-assessment return is submitted which supersedes the determination, that action may continue as if it was an action taken to recover the self-assessed amount (insofar as the self-assessed amount is due and payable and has not been paid).

However, this is capped at the amount of tax that was being recovered in relation to the HMRC determination.