Commentary

A6.705 Timing of a discovery—can a discovery become stale?

Administration and compliance

A6.705 Timing of a discovery—can a discovery become stale?

A6.705 Timing of a discovery—can a discovery become stale?

The discovery provisions allow an HMRC officer to make an assessment to recover a loss of tax where certain conditions are met1. A discovery assessment is often used if the time limit to open an enquiry into the matter has passed. For details of the conditions, see A6.703.

The commentary below discusses whether the HMRC officer must act promptly once a discovery has been made. For the meaning of 'discovery', see A6.704.

Promptness of HMRC action after a discovery

A key issue in discovery cases has become how soon HMRC must raise the discovery assessment after an officer has made the discovery. To discover something implies an element of newness, so the question is how long does HMRC have before the discovery become old or stale—or indeed, is there a requirement for HMRC to act promptly at all? Does there come a point at which something which would otherwise be a valid discovery ceases to be so, in other words becomes stale, if not acted upon?

This was not an issue which was discussed in any depth in many of the historic cases but it became an important consideration in judgements made between 2008 and 2021. The idea of a discovery becoming stale was, however, rejected by the Supreme Court in Tooth in May 2021 (see below).

It is important to note from the outset that the question of staleness is not the same as the assessing time limits themselves. Nothing in the

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