A6.709 Discovery—careless or deliberate behaviour
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 where the discovery relates to a matter incorrectly reported on a tax return due to careless or deliberate behaviour.
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. For specific commentary on discovery for partnerships and companies, see A6.715 and A6.716 respectively.
Statutory protections against a discovery assessment where a tax return filed
As mentioned in A6.703, where a taxpayer has filed a tax return there are a number of statutory protections that prevent HMRC from otherwise issuing a discovery assessment.
Assuming the prevailing practice test2 does not invalidate the discovery assessment (see A6.708), HMRC can only issue a discovery assessment if3:
• the discovery relates to a matter that was brought about carelessly or deliberately by the taxpayer or a person acting on their behalf (see below), or
• the HMRC officer is out of time to open an enquiry into the matter or had opened an enquiry into the matter but this has been closed and the officer could not have been reasonably expected to be aware of the matter at