A6.714 The relationship between a discovery and an assessment
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 the relationship between a discovery and a discovery assessment.
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.
Discovery and discovery assessments
A 2017 case, Clark2, shed some interesting light on the relationship between the making of a discovery and the assessment resulting from that discovery.
The facts are complex but essentially relate to unauthorised payments out of pensions schemes. There was a transfer of funds from Scheme A to B and then a transfer from Scheme B to C. The Tribunal decided that the payment from B to C was not an unauthorised payment but the payment from A to B was an unauthorised payment. From a liability point of view it did not really matter which one was the unauthorised payment as the taxpayer would have been chargeable on broadly the same amount whether the charge was on the A to B or the B to C transfer. This is