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Where Taxpayers and Advisers Meet

Discovery assessment

Posts: 1
Joined: Wed Oct 21, 2015 2:05 am

Discovery assessment

Postby Emmeh » Wed Oct 21, 2015 2:52 am

In May 2012 HMRC wrote to me at an incorrect address requesting details of the sale of a property sold in June 2006. In October 2012 I replied that as my PPR I viewed it as exempt from CGT and provided bank statements requested and limited proof if residence.I assumed that they had accepted this as nOthing was heard back until 13 months later when out of the blue they advised they were investigating me for fraud under code 9 and invited me to make a full disclosure of wrong doings. I declined and reiterated that I had supplied all info via my accountant back in oct 2012. I think as my mother had purchased and sold a property at the same time hmrc were trying to showing both purchases and sales were a trading venture on her part. They never told me this but correspondence sent to her clearly showed this. On 1.4.14 just 4 days before the 6 year time limit expired Hmrc issued a 'careless' discovery assessment stating in their letter that they had done so because the time limit for doing so was about to expire. This was appealed as it was not a venture in trading and in Jan 2015 the 2014 discovery assessment was discharged showing nil profit and a discovery assessment for cgt was raised. I do not consider hmrc had grounds to issue the initial assessment in 2014 as despite over 3 years of investigation they produced no evidence of fraud and should therefore have applied for 4 year time limit. They issued it in desperation as they were running out of time with just 4 days left and eventually conceded that it was not a trading venture. If the grounds for the first discovery assessment were invalid and therefore rendered it issued outside prescribed time limits would the second discovery statement in January 2015 also be invalid as obviously it was outside the 6 year time limit and it only 'amended' or replaced the invalid 2014 assessment. Given that despite extensive fraud investigation there was no profit from trading or evidence of careless/fraudulent behaviour concerning the initial discovery assessment, HMRC issued an assessment for CGT based on information that had been supplied to them 27 months earlier before the code 9 enquiry. HMRC are currently disputing that it was ever my PPR, a separate argument, but one which had they not resorted to dirty tricks would not be necessary to now fight

Posts: 1464
Joined: Wed Aug 06, 2008 3:15 pm

Re: Discovery assessment

Postby Lambs » Wed Oct 21, 2015 3:42 am


Interesting. What's your question? Is it to do with the second discovery assessment? Were you making tax returns back in 2006/07, when the disposal took place? You are generally correct about the 6/4 years but it's 20 if you didn't "notify chargeability". Discovery is a complex issue. What does your accountant say? It would be easy to infer from your post that HMRC were acting inappropriately. But we might need more information in order to come to a conclusion.



John Cassidy
Posts: 8
Joined: Thu Mar 19, 2015 12:18 pm

Re: Discovery assessment

Postby John Cassidy » Wed Oct 21, 2015 7:40 am

In this situation an adviser would need to review carefully all the correspondence and assessments to date. Discovery and Code 9 are complex areas not really capable of simple answers on a forum such as this. Code 9 is a Government body accusing you of fraud and the whole situation needs to be handled carefully and robustly by an experienced and capable expert after he or she has digested all the relevant facts.

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