aim key cog flag clipboard-pencil podium flare signal lamp pie-chart graph scale2 hammer2 balance traffic-lights road archery wall share2 warning notification-circle circle-minus prohibited book book2 bookmark

Call your nearest office

Or ask us a question

Search our site

What are you looking for?

HW Tax Compliance

Discovery powers

Facing a tax investigation? Need to make a disclosure to HMRC? Don’t worry. One of our team will be able to help. Just get in touch.

What are Discovery Powers?

A taxpayer has a time limit in which to make a return to HMRC.  In turn, HMRC has a time limit in which to make enquiries into a return.

If HMRC discovers information after those time limits have passed, in certain circumstances HMRC can use its Discovery Powers and make Discovery Assessments.

How far can HMRC go back?

If the return is considered to have been completed with reasonable care, HMRC can only go back 4 years.

If HMRC can demonstrate that the taxpayer was careless, HMRC can go back 6 years after the end of the year of assessment.

If HMRC can show that the error that led to the understatement was deliberate, HMRC can go back 20 years after the end of the year of assessment.

Why should I be concerned?

For every tax year that HMRC is able to go back, you will owe interest as well as any tax that may be due.  You may also be liable to a penalty.

HMRC will review any new information obtained and consider what further action to take, if any.  If HMRC come across new information, they will consider the matter again for prosecution or in terms of escalating their investigation.  If prosecution is pursued or Code of Practice 9 is issued, you will be denied from using any of the Disclosure Facilities which will be on more favourable terms.

What should I do next?

If you have a Disclosure to make or you are concerned that HMRC may misunderstand any information they may have in their possession, you should seek advice urgently.  Once the decision to prosecute has been taken, it is difficult to reverse.  Simply making a Disclosure does not automatically mean that you have done wrong or that you owe any tax.

If  you wish to discuss this or any other matter with a member of the team, please contact us.

If you cannot find the information you need on our website, please contact Paul Malin or Andy Maxfield using our contact form or email directly to pmalin@hwca.com or amaxfield@hwca.com

Get in touch

Whatever issue or question you have, we’ve got the answer.
If you want to get in
touch then please complete our form.

Birmingham

Haines Watts Birmingham
Sterling House
71 Francis Road
Edgbaston
Birmingham
B16 8SP

Leeds

Haines Watts Leeds
Sterling House
1 Sheepscar Court
Meanwood Road
Leeds
LS7 2BB

London

Haines Watts London
New Derwent House
69 – 73 Theobalds Road
London
WC1X 8TA

Our addresses

Birmingham

Haines Watts Birmingham
Sterling House
71 Francis Road
Edgbaston
Birmingham
B16 8SP

Tel: 0121 456 1613

Leeds

Haines Watts Leeds
Sterling House
1 Sheepscar Court
Meanwood Road
Leeds
LS7 2BB

Tel: 0113 3981100

London

Haines Watts London
New Derwent House
69 – 73 Theobalds Road
London
WC1X 8TA

Tel: 0207 025 4650