A6.710 Discovery—available information and the 'hypothetical officer'
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.
The final protection (as referred to in A6.707) applies where, in shorthand terms, the taxpayer has made sufficient disclosure on his self-assessment return and HMRC has not opened an enquiry (or has completed an enquiry). This protection has in recent years produced a significant amount of litigation and its precise scope is the subject of considerable judicial debate.
The operative part of the protection is found in TMA 1970, s 29(5) which reads as follows:
'(5) The second condition is that at the time when an officer of the Board—
(a) ceased to be entitled to give notice of his intention to enquire into the taxpayer's return under section 8 or 8A of this Act in respect of the relevant year of assessment; or
(b) informed the taxpayer that he had completed his enquiries into that return,
the officer could not have been reasonably expected, on the basis of the information made available to him before that time, to be aware of the situation mentioned in subsection (1) above.'
This provision was, as discussed at A6.702, intended to preserve HMRC's practice in the pre-self-assessment era into the self-assessment regime by putting it onto a statutory footing. However, the precise scope of the protection has become a matter of considerable complexity.
It is therefore necessary to examine each of