Tuesday, April 29, 2008

Discovery assessments (again)

Listening to Keith Gordon of Atlas Chambers speaking about Discovery assessments at a seminar today I feel I should amplify my earlier comments (10 April) on the same subject.

Keith stressed the importance of appealing against discovery assessments within the 30 day time limit. If you have the slightest doubt you should make a protective appeal. You may decide later to withdraw your appeal but once 30 days have passed you're too late.

Keith noted that HMRC often raise discovery assessments that are not valid. As in where the circumstances of the case do not fall within the legislative constraints surrounding discovery assessments. They are only lawful when 3 essential elements exist:

1- HMRC must have made a discovery (see SP 8/91)
2 - There must have been a loss of tax; and
a) Insufficient information was supplied by the taxpayer
b) The taxpayer's conduct was negligent or fraudulent

Discovery assessments enable HMRC to generate 'easy' money as appeals are often not made within the 30 day time limit even though the 3 tests have not been satisfied.

If you are in any doubt about the validity of a Discovery assessment, you can find help here in the Tax Advice Network, via a simple 'search' eg: for Discovery assessment.

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