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HMRC internal manual

Tax Credits Technical Manual

Discovery decisions - Income tax liability

When the time limits for a s19 prevent us from opening an enquiry, or there has already been an enquiry and we receive new information, S20 (1) allows us to revise the award where it is incorrect due to a revision of income tax liability. S20 (2) provides a lists of the relevant adjustments that lead to a revision. It does not need to be due to fraud or neglect. The revision must be made within one year of the adjustment to the income tax liability.

S20 (1) Where in consequence of a person’s income tax liability being revised the Board have reasonable grounds for believing that a conclusive decision relating to his entitlement to a tax credit for a tax year (whether or not jointly with another person) is not correct, the Board may decide to revise that decision.

S20 (3) no decision may be made under subsection (1)-

(a) unless it is too late to enquire into the person’s entitlement under section 19, or

(b) after the period of one year beginning when the person’s income tax liability is revised.