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HMRC internal manual

Self Assessment Manual

Assessments: assessments within SA: discovery assessment

A discovery assessment made under Section 29 TMA 1970 will normally be made when evidence has emerged suggesting that there have been omissions for years for which no SA enquiry window exists.

HMRC powers to make a discovery assessment will generally be used either

  • After the period for opening an enquiry into an SA return has passed

Or

  • After an enquiry into that year’s SA return has been closed

Subject to the conditions in S29 TMA 1970 you may make a discovery assessment for a tax year to recover a loss of tax where

  • There are profits which ought to have been assessed but have not been assessed

Or

  • An assessment (including a self assessment) has become insufficient

Or

  • Any relief that has been given has become excessive

You may not make a discovery assessment if

  • The return was made in accordance with the practice prevailing at that time, even if HMRC subsequently changes its practice in relation to a particular item and a resulting loss of tax arises

Or

  • The enquiry window has closed or the enquiry has been completed, and the information enabling the discovery was made available before that event

Discovery assessments are subject to appeal and postponement application. Guidance on handling appeals and postponements can be found at SAM10000 and SAM11000 respectively.

Detailed guidance concerning the discovery provisions can be found in the Enquiry Manual. (See EM3201 onwards).

Where you are making a discovery assessment as the result of an enquiry for which there is a record on the CQI Workbench, you should not create a separate record on the CQI Workbench. In these cases you should include adjustments and yield on the CQI record for the earliest ‘open’ enquiry.

Where you are making a discovery assessment following investigations under the discovery provisions in a case which is not linked to an open enquiry into a later return, you should create a record on the CQI Workbench using function CREATE ITSA DISCOVERY. Follow the guidance in the Action Guide ‘Discovery: Recording cases on the CQI Workbench’ (SAM31052) when creating or updating these records.

Where you are making a discovery assessment, accepting the figures available without further investigation, you must not record this on the CQI Workbench.

Notes:

1. SA payments on account may require increasing following the issue of a discovery assessment
   
2. The relevant due date for Section 101FA2009 and Schedule 53 (Section 86, TMA1970 up to 30 October 2011) interest will be the statutory dates for the year of assessment