Discovery assessment outside 4 year window

[webberg]

We are starting to see discovery assessments being issued by HMRC under section 36(1A) TMA 1970.

Section 36 gives HMRC power to open an assessment up to 6 years after the end of the year of assessment where the "loss of tax" has been "brought about carelessly".

Subsection 1A, says that an assessment can be raised up to 20 years after the year of assessment where:

a) there has been a deliberate attempt to hide income
b) there has been a failure to provide a return requested
c) arising from arrangements where a person has failed to register under DOTAS
d) has failed to give a DOTAS number

These are either/or tests so tripping any one of them will give HMRC an ability to raise an assessment.

There are some safeguards here for taxpayers and in particular b and c above cannot apply for 2008/09 and earlier unless there has been some negligent conduct.

We will be looking very hard at these assessments but I suspect that a trip to Tribunal may well be on the cards.

[jbryce]

We are starting to see discovery assessments being issued by HMRC under section 36(1A) TMA 1970.

Section 36 gives HMRC power to open an assessment up to 6 years after the end of the year of assessment where the "loss of tax" has been "brought about carelessly".

Subsection 1A, says that an assessment can be raised up to 20 years after the year of assessment where:

a) there has been a deliberate attempt to hide income
b) there has been a failure to provide a return requested
c) arising from arrangements where a person has failed to register under DOTAS
d) has failed to give a DOTAS number

These are either/or tests so tripping any one of them will give HMRC an ability to raise an assessment.

There are some safeguards here for taxpayers and in particular b and c above cannot apply for 2008/09 and earlier unless there has been some negligent conduct.

We will be looking very hard at these assessments but I suspect that a trip to Tribunal may well be on the cards.

...is this ever going to end?

[ChimpMaster]

What's the difference between these two?

c) arising from arrangements where a person has failed to register under DOTAS
d) has failed to give a DOTAS number


For (c) is it for scheme providers rather than users - because it is the providers who would register?

For (d) how about the situation when the provider didn't register and hence the user didn't have a DOTAS number?

[webberg]

The rules about who was expected to notify a DOTAS arrangement have changed over the years.

Initially it was promoters and advisers. Since then they have widened and now include users.

This is what c) is about.

d) is where you have been given a DOTAS number but chosen not to include it.