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Where Taxpayers and Advisers Meet

Discovery assessment/enquiry question

Samson22
Posts: 43
Joined: Mon Aug 17, 2020 10:54 am

Discovery assessment/enquiry question

Postby Samson22 » Fri Sep 11, 2020 5:12 pm

Hi All.
My question is Do discovery assessments come after the investigation/enquiry ? Or can they literally come out of the blue? I would not think so given under code of conduct of 9 and up to 20 years back they give 60 to respond. But with discovery assessments from what I have read demand payment in 30 days and these 'assessments can' apply even in the 20 year back.

bd6759
Posts: 3344
Joined: Sat Feb 01, 2014 3:26 pm

Re: Discovery assessment/enquiry question

Postby bd6759 » Fri Sep 11, 2020 8:44 pm

A discovery assessment can be made at any time. There is a current doctrine of “staleness” propositioned by the Courts that means HMRC must assess within a reasonable time of the discovery. That might be encouraging HMRC to make assessments sooner than they used to.

In reality they never come out of the blue. HMRC will contact you first. Assessments during an enquiry are only necessary to protect time limits: usually made in Natch if the 4,6 or 20 year limits are about to expire.

If the assessment is wrong you appeal and ask for payment of the tax to be postponed. HMRC usually agree, unless they have reason to believe you will use the opportunity to dispose assets.

wamstax
Posts: 1931
Joined: Wed Aug 06, 2008 3:39 pm
Location: Operate Nationally but based in Aberdeen
Contact:

Re: Discovery assessment/enquiry question

Postby wamstax » Fri Sep 11, 2020 9:28 pm

If your question has arisen because you are aware that you have underpaid serious amounts of income tax or other duties (given that you mention COP9) I would recommend that in that event you seriously consider making an unprompted disclosure via a suitably qualified tax investigation specialist to get the benefit of a lower rate of penalty. Additionally of course where you make an unprompted disclosure HMRC would be more inclined to give the benefit of the doubt to marginally evidenced matters
regards and hope this helps
http://www.wamstaxltd.com
Operates Nationally with competitive costs
and email and phone contact (mob 07751720507) can be obtained from websites

Samson22
Posts: 43
Joined: Mon Aug 17, 2020 10:54 am

Re: Discovery assessment/enquiry question

Postby Samson22 » Sat Sep 12, 2020 6:14 am

Thanks both of you. Neither me or anyone I know is effected by any of this. Just found it odd assessments expect to be paid within 30 days and they cover even deliberate cases. But code of conduct 9 expect a response let alone payment in 60 . If assessments covered up to careless I could get it.

bd6759
Posts: 3344
Joined: Sat Feb 01, 2014 3:26 pm

Re: Discovery assessment/enquiry question

Postby bd6759 » Sat Sep 12, 2020 9:48 pm

Are you saying they HMRC shouldn’t not be able to assess those that have evaded tax and are unwilling to cooperate?

Samson22
Posts: 43
Joined: Mon Aug 17, 2020 10:54 am

Re: Discovery assessment/enquiry question

Postby Samson22 » Sun Sep 13, 2020 3:35 am

My personal view is they waste vast sums. I won't labour that however. My curiosity just thought it odd assessment can demand payment in 30 days but code 9 the time line is longer for same behaviour deliberate( though the meaning seems to be elastic these days )

Samson22
Posts: 43
Joined: Mon Aug 17, 2020 10:54 am

Re: Discovery assessment/enquiry question

Postby Samson22 » Sun Sep 13, 2020 3:54 am

Just like I found it odd they can only go back 6 years for deceased people but 20 for alive. Which I have no explanation as income tax is a liability for iht purposes. It may be due to Europe law but it still strange penalties do not apply even if issued during life time.
Moreover I suspect but don't know if someone is being investigated for deliberatel behaviour, issued a code 9 leaflet/letter then passes away it will limit hmrc to 6 years again.

The tax system is a spiders Web mainly for middle class. Just look at the 60% band between 100k - 125k experience expanding since 2009 yet the top rate was cut to 45. The temporary increase of vat in 2011 is semi permanent as per interest rates. I imagine the downgrading of the triple lock 'temporarily ' will be same

AnthonyR
Posts: 321
Joined: Wed Feb 08, 2017 2:33 pm

Re: Discovery assessment/enquiry question

Postby AnthonyR » Mon Sep 14, 2020 8:57 am

My personal view is they waste vast sums. I won't labour that however. My curiosity just thought it odd assessment can demand payment in 30 days but code 9 the time line is longer for same behaviour deliberate( though the meaning seems to be elastic these days )
In practice assessments are only issued as a last resort (where taxpayers are not responding or there are time limits that HMRC have to satisfy). Usually in cases such as COP9 enquiries there is a long process, investigations, reports and an eventual agreement of the tax due. My last COP9 case took nearly 2 years between the notice being issued and the taxpayer actually paying any tax (then due to COVID HMRC gave a further 90 days to pay).
Anthony Rogers LLB CTA TEP
Fusion Partners LLP
anthony@fusionpartners.co.uk

Samson22
Posts: 43
Joined: Mon Aug 17, 2020 10:54 am

Re: Discovery assessment/enquiry question

Postby Samson22 » Mon Sep 14, 2020 2:06 pm

That's interesting, though if they were to go back 20 years would they really be obsessed a single year from grasp. Quite possibly. Did that client of yours get criminally prosecuted? I would imagine it is hard to quantify the correct amount given record keeping for expenses go back only 6 years

wamstax
Posts: 1931
Joined: Wed Aug 06, 2008 3:39 pm
Location: Operate Nationally but based in Aberdeen
Contact:

Re: Discovery assessment/enquiry question

Postby wamstax » Sat Oct 17, 2020 2:45 pm

COP9 means civil settlement and immunity from prosecution. I am afraid that you are trying to understand different procedures that take usually years of training and experience to understand both their interaction or stand alone qualities.

Maybe you should enrol with a tax course and you’ll manage to appreciate it is not appropriate to compare the initial COP9 procedures with the issue of discovery assessments
regards and hope this helps
http://www.wamstaxltd.com
Operates Nationally with competitive costs
and email and phone contact (mob 07751720507) can be obtained from websites


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