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Taxing matters

09 January 2015 / Peter Vaines
Issue: 7635 / Categories: Features , Tax , Commercial
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Peter Vaines wonders whether the meaning of “discovery” is too wide

If HMRC wish to raise an assessment beyond the enquiry window they must first make a discovery. That means the tax officer has to discover that:

  • there are income and gains which ought to be assessed;
  • an assessment to tax has become insufficient; or
  • a relief which had been given has become excessive.

In these circumstances, Taxes Management Act 1970(TMA 1970), s 29 allows HMRC to raise a discovery assessment—providing certain other conditions are satisfied.

We know from Charlton (and many other authorities) that a discovery means that it has newly appeared to an officer that there is an insufficiency in an assessment. A change of view, a change of opinion or the correction of an oversight is a discovery for this purpose. It can also include a discovery that the law had been wrongly applied or that the officer had made a mistake about the law.

The meaning of “discovery” is therefore extremely wide. However, it must mean something. What

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