SAM20010 | Assessments: stand-alone assessments: discovery assessment

A discovery assessment made under Section 29 TMA 1970 will normally be made when we have evidence there’s been a loss of tax for years where no SA enquiry window exists.

HMRC powers will make a discovery assessment either

• After the closure of an enquiry window

Or

• After an enquiry into that year’s SA return has been closed

Subject to the conditions in S29 TMA 1970, see EM3251+, you may make a discovery assessment for a tax year to recover a loss of tax where

• There are profits which ought to have been assessed but haven’t been assessed

Or

• An assessment (including a self-assessment) has become insufficient

Or

• Any relief that has been given has become excessive

You may not make a discovery assessment if

• The return was made in accordance with the practice prevailing at that time, even if HMRC subsequently changes its practice in relation to a particular item and a resulting loss of tax arises

Or

• The enquiry window has closed or the enquiry has been completed, the information enabling the discovery was made available before that event and the behaviour behind the insufficiency was a mistake despite taking reasonable care

Detailed guidance concerning the discovery provisions can be found in the Enquiry Manual (see EM3201 onwards).

Discovery assessments are subject to appeal and postponement application. Guidance on handling appeals and postponements can be found at SAM10000 and SAM11000 respectively.

Where you are making a discovery assessment following a discovery compliance check and the case is not linked to an open enquiry into a later return, you should create a record on Caseflow.

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