EM3233 - Discovery: making a discovery - whether there is a discovery: was the information made available
s29(5) TMA 1970 and Paragraph 44 FA 1998 provides the condition to validate the discovery assessment the ‘hypothetical officer’ could not have been reasonably expected, at the time when HMRC ceased to be entitled to open an enquiry or after a closure notice was issued, based on the information made available, to be aware of the insufficiency.
The ‘hypothetical officer’ is deemed to have the
general competence, knowledge and skills needed to understand the return in
front of them. This includes knowledge of any court decisions and publications
made by HMRC
Information ‘made available’ in respect of any year of assessment (or accounting period for CTSA) is defined as information that is
- contained in a relevant return or any accounts, statements or documents accompanying a relevant return
- contained in any relevant claim or accompanying accounts, statements or documents
- contained in any documents, accounts or particulars supplied in connection with an enquiry into any relevant returns or claims
- information whose existence could be reasonably expected to be inferred from information available under items (a) to (c) above or information notified in writing to HMRC by the taxpayer.
‘Relevant’ returns and claims are the taxpayer’s returns and claims for the year of assessment and each of the two immediately preceding years of assessment (or accounting periods for CTSA).
The test is a test of disclosure and whether the taxpayer's disclosure was adequate to provide enough information to make the hypothetical officer aware of the actual insufficiency. It is not enough to make the hypothetical officer aware that they need to ask questions or check something to see whether there is an insufficiency.
If the taxpayer considers they have provided documents or other information that made HMRC aware of the insufficiency, HMRC officers should contact the Specialist Technical Team for advice, see EM21000.
Neither of the conditions in s29(4) or s29(5) need to be satisfied if the taxpayer has not submitted a return or there is a failure to notify situation. For more information on the use of information powers where there is no return, see EM3235.