A6.704 Discovery—what is meant by the term discover?
As noted at A6.703, there are three concepts which are fundamental to discovery, the most important of which is the meaning of the word discover itself.
Note that the commentary below refers only to the legislation as it applies to individuals, but unless otherwise stated, it can be assumed that it also applies to partnerships and companies.
Although the term discover has been part of tax law since 1803 it has never been defined in statute. It has however been the subject of considerable case law.
The case law can broadly be considered to have concluded that:
(a) no new facts have to have come to light for there to be a discovery — a new interpretation of existing known facts is sufficient
(b) however, when a discovery is made, the HMRC officer at the time must have had a belief that tax had been under-assessed and that belief must have been reasonable
Point (a) is discussed in this article below. The second point, (b) is further split into two further elements:
– the timing of a discovery and whether or not a discovery can become stale (see A6.705)
– the officer's belief (see A6.706)
Do new facts have to come to light for there