HMRC Discovery Assessments
HMRC enjoys the right, even where the time limit for opening an investigation has passed, to revisit a Self- Assessment Return and pursue a ‘Discovery Assessment’.
Where appropriate, it may issue an Assessment where underpayment of tax has been discovered or too many tax reliefs have been received and financial penalties may be imposed in the event that any irregularity is discovered.
This power is contained within section 29 of The Taxes Management Act 1970 (‘the Act’) upon which John Veale of Kangs Solicitors now comments.
The Team at Kangs Solicitors has vast experience and is highly regarded nationwide for assisting clients facing:
- HMRC Civil Tax Investigations (COP8 & COP)
- HMRC Criminal Fraud Investigations
- Company Director disqualification and other misdemeanours
- Insolvency and Bankruptcy Litigation
Our Team is led by Hamraj Kang, recognised as a leading expert and annually ranked as a ‘star individual’ in the legal directory Chambers & Partners.
Other members of the Team are also ranked in Chambers & Partners as well as The Legal 500.
For an initial no obligation discussion, please contact our team at any of the offices detailed
0207 936 6396
0121 449 9888
0161 817 5020
24 Hours number
When Will HMRC Look at a Self-Assessment Return? | Kangs Tax Investigations Solicitors
Under section 29 (1) of the Act:
If HMRC discover, as regards any taxpayer and a year of assessment that:
- an amount of income tax or capital gains tax ought to have been assessed but has not been assessed,
- an assessment to tax is or has become insufficient, or
- any relief which has been given is or has become excessive,
HMRC may, subject to subsections (2) and (3) below, make an assessment in the amount, or the further amount, which ought in its opinion ought to be charged in order to make good to the Crown the loss of tax.
Section 29 (2) of the Act provides that:
- where the taxpayer has made and delivered a return………in respect of the relevant year of assessment, and
- the situation mentioned in subsection (1) above is attributable to an error or mistake in the return as to the basis on which his liability ought to have been computed,
the taxpayer shall not be assessed under that subsection in respect of the year of assessment there mentioned if the return was in fact made on the basis or in accordance with the practice generally prevailing at the time when it was made.
Section 29 (3) of the Act provides that:
Where the taxpayer has made and delivered a return …in respect of the relevant year of assessment, he shall not be assessed under subsection (1) above:
- in respect of the year of assessment mentioned in that subsection; and
- in the same capacity as that in which he made and delivered the return,
unless one of the two conditions mentioned below is fulfilled.
Those two conditions are contained in sections 29 (4) and (5), and state:
- The First Condition:
- The Second Condition: at the time when HMRC ceased to be entitled to give notice of its intention to enquire into the taxpayer’s return………. or in a case where a notice of enquiry into the return was given, issued a partial closure notice as regards a matter to which the situation mentioned in subsection (1) above relates, or, if no such partial notice was issued, issued a final closure notice
HMRC could not have been reasonably expected, on the basis of the information made available to it before that time, to be aware of the situation mentioned in subsection (1) above.
As well as Assessments being issued by HMRC, the taxpayer can become subject to interest on the Assessment amount if unpaid.
In circumstances where the taxpayer or those acting for them have acted carelessly or deliberately in completing an assessment, the taxpayer can be liable to a penalty of between 30% to 100% of the Assessment amount.
Who Can I Contact for Advice & Help? | Kangs HMRC Offences Defence Solicitors
If you receive Notice of an Enquiry into your Self -Assessment Return from HMRC, or indeed, any notification of other form of investigation by HMRC, you should seek legal advice immediately.
HMRC Investigations of any nature are normally complicated and detailed with potentially serious repercussions if enquires are ignored.
The Team at Kangs Solicitors will assist you with any HMRC enquiry and will guide you through all processes with a view to resolving matters as quickly and favourably as possible.
We provide initial no obligation discussion at our three offices in London, Birmingham and Manchester.
Alternatively, discussions can be held virtually through live conferencing or telephone.