DST63000 | Discovery Assessments

This guidance focuses on the legal background of discovery assessments in the DST context. There is existing procedural guidance in the Enquiry Manual at EM3200 which should also be consulted.

As established in FA20, Schedule 8, part 6, the self-assessment contained in a DST return creates a legal charge to tax. Subject to the right of HMRC to make a discovery assessment, the return is final once made. This is unless, within the relevant time limits, the responsible member amends the return or an HMRC officer decides to open a compliance check into it.

The ability to make discovery assessments ensures that additional tax liable as a result of mistaken or incorrect DST returns is assessed. There are taxpayer safeguards and restrictions governing the use of discovery assessments, including time limits on when an assessment can be made which are derived from customer behaviour.

It is important to note that discovery assessments are for circumstances where careless or deliberate behaviour is evident and that results in a loss of tax, the information surrounding which was not made available to HMRC.

The following pages set out the use of these powers in more detail, including the time limits by which a discovery assessment is to be issued, its scope and what a notice of assessment must include.