Discovery assessments—sufficient disclosure of information
Produced in partnership with Cathya Djanogly
Discovery assessments—sufficient disclosure of information

The following Tax practice note produced in partnership with Cathya Djanogly provides comprehensive and up to date legal information covering:

  • Discovery assessments—sufficient disclosure of information
  • Should HMRC have been aware of the under-assessment?
  • Langham v Veltema—how much information is sufficient?
  • HMRC guidance on Langham v Veltema—Statement of Practice 1 (2006)
  • Valuations
  • Exceptional items in accounts
  • Taking a different view from HMRC
  • Excessive amounts of information
  • Meaning of available information
  • Information made available by inference
  • More...

Sometimes HMRC will come to the view that a taxpayer has paid, or been assessed for, too little tax, but will come to this view at a time when it is too late to open an enquiry into the relevant tax return. In this situation, HMRC will normally have to rely on its ability to make a discovery assessment.

A discovery assessment is an assessment to tax (or more tax) by HMRC where it discovers that too little tax has been assessed for a past year or accounting period.

If the taxpayer has submitted a return for the period or year concerned, HMRC can issue a discovery assessment only if:

  1. the potential loss of tax was due to careless or deliberate behaviour by the taxpayer or their agent, or

  2. at the time when an HMRC officer ceased to be entitled to open an enquiry into the return (or issued a closure notice in respect of an existing enquiry), the officer could not reasonably have been expected, on the basis of the information made available to them at that time, to be aware of the loss of tax

This Practice Note is about the second of these conditions, and specifically, the circumstances in which the disclosure of information in a tax return will be sufficient to prevent HMRC from making a discovery assessment once the enquiry window has

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