Assessments raised outside the enquiry window
A discovery assessment is HMRC asserting it has found a loss of tax for a year it can no longer enquire into. Whether it stands is often the real question.
Discovery assessments carry appeal rights with strict time limits — commonly 30 days from the date of the assessment. Do not let the period lapse while deciding what to do.
What HMRC has to establish
A discovery assessment is not simply a late enquiry. Under Section 29 of the Taxes Management Act 1970, HMRC must have made a discovery, and statutory conditions must be satisfied before an assessment can validly be raised outside the ordinary window.
That creates two distinct questions, and they are often confused. The first is whether the tax figure is right. The second is whether HMRC was entitled to raise the assessment at all. The second question is frequently the stronger ground, and it is the one most often left unexamined.
What we do
- Protect the position by appealing within the statutory time limit
- Examine whether the conditions for a valid discovery are actually met
- Test which behaviour HMRC is asserting, since it drives how far back it can go
- Review whether earlier disclosure made the position sufficiently apparent to HMRC
- Deal with postponement of the tax pending resolution where appropriate
- Take the matter through review or to tribunal where that is the right course
Behaviour drives the time limits
How far back HMRC can assess depends on whether it says the position arose despite reasonable care, from carelessness, or from deliberate conduct. Offshore matters have their own extended limits. An assessment that assumes deliberate conduct where the facts support carelessness is asserting a longer reach than it may be entitled to, and that is a point worth putting rather than accepting.
Appealing an assessment and paying it are separate questions. Where an appeal is made, it may be possible to postpone payment of the disputed tax pending resolution — but that must be applied for rather than assumed.
Common questions
What is a discovery assessment?
It is an assessment HMRC raises outside the normal enquiry window, on the basis that it has discovered a loss of tax. For Self Assessment it is made under Section 29 of the Taxes Management Act 1970. It is not the same as opening an enquiry, and it is subject to statutory conditions.
Can a discovery assessment be challenged?
Yes. Discovery assessments carry appeal rights with strict time limits, commonly 30 days from the date of the assessment. A challenge can go to the validity of the discovery itself, not only to the amount assessed.
How far back can HMRC go?
The time limits depend on the behaviour involved, with longer periods where the position arose from carelessness and longer still for deliberate conduct. Offshore matters have their own extended limits. Which applies is frequently the point in dispute.
What if I have missed the appeal deadline?
A late appeal can be made, but it requires HMRC or the tribunal to accept it, and acceptance is not automatic. If the deadline has passed it is worth taking advice quickly rather than assuming the position is closed.
Start with the letter
Send a photo of page one on WhatsApp. We will tell you what it is, what the deadline means, and what a fixed fee would look like — within one working hourduring monday to friday, 9am to 5pm.
We only need the letter. Please do not send bank statements, identity documents or your UTR at this stage.