SALF411 - Enquiries into tax returns: time limits for discovery assessments

Section 34(1)

In any case of incomplete disclosure without careless or deliberate conduct the time limit for a discovery assessment is not later than 4 years after the end of the tax year to which it relates.

Section 36(1) and (1A)

In any case involving a loss of tax brought about carelessly, the time limit for making a discovery assessment is not later than 6 years after the end of tax year to which the assessment relates.

The time limit for making a discovery assessment is not later than 20 years after the end of the tax year to which it relates where the loss of tax is:

• brought about deliberately by the person
• attributable to a failure to notify liability under Section 7, or
• attributable to an avoidance scheme notifiable under DOTAS and the person making the return has not complied with their obligations under DOTAS to tell HMRC they have used that scheme, or
• attributable to an avoidance scheme promoted by a Monitored Promoter (under POTAS) and the person making the return has failed to include the Promoter Reference Number on their return.

Section 36A

The time limit is extended to 12 years for Income Tax, Capital Gains Tax, and Inheritance Tax involving offshore matters or offshore transfers.

The 12-year time limit only applies where the lost tax involves an:

• offshore matter, see CH53520, or
• offshore transfer which makes the loss of tax significantly harder for HMRC to identify, see CH53530 and CH53540.

Payment of tax

Section 59B(6)

The due date for tax charged by a discovery assessment is 30 days after the notice of the assessment is given (delivered).