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Finance Act 1998, Part V is up to date with all changes known to be in force on or before 17 August 2024. There are changes that may be brought into force at a future date. Changes that have been made appear in the content and are referenced with annotations.
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Modifications etc. (not altering text)
C1Sch. 18 applied (20.7.2005) by Finance (No. 2) Act 2005 (c. 22), s. 61
36(1)If no return is delivered in response to a notice requiring a company tax return, [F1an officer of Revenue and Customs] may determine to the best of [F2his] information and belief the amount of tax payable by the company.U.K.
(2)The power to make a determination under this paragraph becomes exercisable if no return is delivered on or before the following date—
(a)if the filing date for any return required by the notice can be ascertained, that date;
(b)if no such date can be ascertained, the later of—
(i)18 months from the end of the period specified in the notice, or
(ii)three months from the day on which the notice was served.
(3)The accounting period or periods for which a determination may be made are—
(a)if there is only one accounting period ending in or at the end of the period specified in the notice, that period;
(b)if there is more than one accounting period ending in or at the end of the period specified in the notice, each of those periods;
(c)if [F1an officer of Revenue and Customs] [F2has] insufficient information to identify the accounting periods of the company, such period or periods ending in or at the end of the period specified in the notice as [F2he] may determine.
(4)Notice of a determination under this paragraph must be served on the company, stating the date on which the determination is issued.
(5)No determination under this paragraph may be made more than five years after the day on which the power becomes exercisable.
(6)If the company shows—
(a)that there is no accounting period of the company ending in or at the end of the period specified in the notice, or
(b)that it has delivered a return for the accounting period, or each accounting period, ending in or at the end of the period specified in the notice, or
(c)that no return is yet due for any such period,
any determination under this paragraph is of no effect.
Textual Amendments
F1Words in Sch. 18 substituted (18.4.2005) by Commissioners for Revenue and Customs Act 2005 (c. 11), s. 53(1), Sch. 4 para. 68(a); S.I. 2005/1126, art. 2(2)(h)
F2Words in Sch. 18 substituted (18.4.2005) by virtue of Commissioners for Revenue and Customs Act 2005 (c. 11), s. 53(1), Sch. 4 para. 68(c); S.I. 2005/1126, art. 2(2)(h)
37(1)If a notice requiring a company tax return is served on a company and—U.K.
(a)a return is delivered for an accounting period ending in or at the end of the period specified in the notice, but
(b)there is another period so ending (the “outstanding period") which appears to [F1an officer of Revenue and Customs] is or may be an accounting period,
[F1an officer of Revenue and Customs] may determine to the best of [F2his] information and belief the amount of corporation tax payable by the company for the outstanding period.
(2)The power to make a determination under this paragraph becomes exercisable—
(a)if the filing date for the outstanding period can be ascertained and no return is delivered on or before that date;
(b)if no such date can be ascertained and no return for that period is delivered by the later of—
(i)30 months from the end of the period specified in the notice, or
(ii)three months from the day on which the notice was served.
(3)Notice of a determination under this paragraph must be served on the company, stating the date on which the determination is issued.
(4)No determination under this paragraph may be made more than five years after the day on which the power first became exercisable.
(5)If the company shows—
(a)that the outstanding period is not an accounting period, or
(b)that it has delivered a return for that period,
any determination under this paragraph is of no effect.
Textual Amendments
F1Words in Sch. 18 substituted (18.4.2005) by Commissioners for Revenue and Customs Act 2005 (c. 11), s. 53(1), Sch. 4 para. 68(a); S.I. 2005/1126, art. 2(2)(h)
F2Words in Sch. 18 substituted (18.4.2005) by virtue of Commissioners for Revenue and Customs Act 2005 (c. 11), s. 53(1), Sch. 4 para. 68(c); S.I. 2005/1126, art. 2(2)(h)
38(1)The power to make a determination under paragraph 36 or 37 includes power to determine—U.K.
(a)any of the amounts mentioned in paragraph 8(1) (calculation of amount of tax payable), and
(b)any amount forming part of the calculation of any of those amounts.
(2)Notice of a determination under either of those paragraphs may be accompanied by notice of any determination by [F1an officer of Revenue and Customs] relating to the dates on which amounts of tax become due and payable under section 59D or 59E of the M1Taxes Management Act 1970.
Textual Amendments
F1Words in Sch. 18 substituted (18.4.2005) by Commissioners for Revenue and Customs Act 2005 (c. 11), s. 53(1), Sch. 4 para. 68(a); S.I. 2005/1126, art. 2(2)(h)
Marginal Citations
39(1)A determination under paragraph 36 or 37 has effect for enforcement purposes as if it were a self-assessment by the company.U.K.
(2)In sub-paragraph (1) “for enforcement purposes” means for the purposes of —
(a)the following Parts of the M2Taxes Management Act 1970—
Part VA (payment),
Part VI (collection and recovery),
Part IX (interest on overdue tax), and
Part XI (miscellaneous and supplementary provisions);
(b)the provisions of this Schedule imposing tax-related penalties; and
(c) the provisions of the Corporation Tax Acts enabling unpaid tax assessed on a company to be assessed on other persons.
(3) For those purposes the period for which the determination is made shall be treated as an accounting period of the company, even though—
(a) in the case of a determination under paragraph 36, [F1an officer of Revenue and Customs] [F2has] insufficient information to determine the accounting periods of the company and [F2exercises his] power under sub-paragraph (3)(c) of that paragraph, or
(b) in the case of a determination under paragraph 37, [F1an officer of Revenue and Customs] [F2has] insufficient information to determine whether the outstanding period is an accounting period.
Textual Amendments
F1Words in Sch. 18 substituted (18.4.2005) by Commissioners for Revenue and Customs Act 2005 (c. 11), s. 53(1), Sch. 4 para. 68(a); S.I. 2005/1126, art. 2(2)(h)
F2Words in Sch. 18 substituted (18.4.2005) by virtue of Commissioners for Revenue and Customs Act 2005 (c. 11), s. 53(1), Sch. 4 para. 68(c); S.I. 2005/1126, art. 2(2)(h)
Marginal Citations
40(1)If after a determination has been made under paragraph 36—U.K.
(a)the company delivers a company tax return for a period ending in or at the end of the period specified in the notice requiring a company tax return, and
(b)the period is, or is treated in the return as, an accounting period,
the self-assessment included in that return supersedes the determination or, if there is more than one, the determination for the period which is, or most closely approximates to, the period for which the return is made.
(2)If after a determination has been made under paragraph 37—
(a)the company delivers a further company tax return for a period ending in or at the end of the period specified in the notice requiring a company tax return, and
(b)the period is, or is treated in the return as, an accounting period,
the self-assessment included in that return supersedes the determination.
(3)Sub-paragraphs (1) and (2) do not apply to a return made—
(a)more than five years after the day on which the power to make the determination first became exercisable (see paragraph 36(2) or 37(2)), or
(b)more than twelve months after the date of the determination,
whichever is the later.
(4)Where—
(a)[F3proceedings have been begun] for the recovery of any tax charged by a determination under paragraph 36 or 37, and
(b)before the proceedings are concluded the determination is superseded by a self-assessment,
the proceedings may be continued as if they were proceedings for the recovery of so much of the tax charged by the self-assessment as is due and payable and has not been paid.
Textual Amendments
F3Words in Sch. 18 para. 40(4) substituted (11.5.2001 with application as mentioned in Sch. 29 para 17(3) of the amending Act) by 2001 c. 9, s. 88, Sch. 29 para. 17(2)
41(1)If [F1an officer of Revenue and Customs] [F2discovers] as regards an accounting period of a company that—U.K.
(a)an amount which ought to have been assessed to tax has not been assessed, or
(b)an assessment to tax is or has become insufficient, or
(c)relief has been given which is or has become excessive,
[F2he] may make an assessment (a “discovery assessment") in the amount or further amount which ought in [F2his] opinion to be charged in order to make good to the Crown the loss of tax.
(2)If [F1an officer of Revenue and Customs] [F2discovers] that a company tax return delivered by a company for an accounting period incorrectly states—
(a)an amount that affects, or may affect, the tax payable by that company for another accounting period, or
(b)an amount that affects, or may affect, the tax liability of another company,
[F2he] may make a determination (a “discovery determination") of the amount which in [F2his] opinion ought to have been stated in the return.
Textual Amendments
F1Words in Sch. 18 substituted (18.4.2005) by Commissioners for Revenue and Customs Act 2005 (c. 11), s. 53(1), Sch. 4 para. 68(a); S.I. 2005/1126, art. 2(2)(h)
F2Words in Sch. 18 substituted (18.4.2005) by virtue of Commissioners for Revenue and Customs Act 2005 (c. 11), s. 53(1), Sch. 4 para. 68(c); S.I. 2005/1126, art. 2(2)(h)
42(1)The power to make—U.K.
(a)a discovery assessment for an accounting period for which the company has delivered a company tax return, or
(b)a discovery determination,
is only exercisable in the circumstances specified in paragraph 43 or 44 and subject to paragraph 45 below.
(2)Those restrictions do not apply to an assessment or determination which only gives effect to a discovery determination duly made with respect to an amount stated in another company’s company tax return.
[F4(2A)Those restrictions, other than the restriction in paragraph 45, do not apply so far as regards any income or chargeable gains of the company in relation to which the company has been given, after any enquiries have been completed into the return, a notice under section 804ZA of the Taxes Act 1988 [F5or section 24 or 26 of the Finance (No. 2) Act 2005].]
(3)Any objection to a discovery assessment or determination on the ground that those paragraphs have not been complied with can only be made on an appeal against the assessment or determination.
Textual Amendments
F4Sch. 18 para. 42(2A) inserted (with effect in accordance with s. 88(5) of the amending Act) by Finance Act 2005 (c. 7), s. 88(4)
F5Words in Sch. 18 para. 42(2A) inserted (with effect in accordance with s. 31 of the amending Act) by Finance (No. 2) Act 2005 (c. 22), s. 29(2)
43U.K.A discovery assessment for an accounting period for which the company has delivered a company tax return, or a discovery determination, may be made if the situation mentioned in paragraph 41(1) or (2) is attributable to fraudulent or negligent conduct on the part of—
(a)the company, or
(b)a person acting on behalf of the company, or
(c)a person who was a partner of the company at the relevant time.
44(1)A discovery assessment for an accounting period for which the company has delivered a company tax return, or a discovery determination, may be made if at the time when [F1an officer of Revenue and Customs]—U.K.
(a)ceased to be entitled to give a notice of enquiry into the return, or
(b)completed [F2his] enquiries into the return,
[F2he] could not have been reasonably expected, on the basis of the information made available to [F2him] before that time, to be aware of the situation mentioned in paragraph 41(1) or (2).
(2)For this purpose information is regarded as made available to [F1an officer of Revenue and Customs] if—
(a)it is contained in a relevant return by the company or in documents accompanying any such return, or
(b)it is contained in a relevant claim made by the company or in any accounts, statements or documents accompanying any such claim, or
(c)it is contained in any documents, accounts or information produced or provided by the company to [F1an officer of Revenue and Customs] for the purposes of an enquiry into any such return or claim, or
(d)it is information the existence of which, and the relevance of which as regards the situation mentioned in paragraph 41(1) or (2)—
(i)could reasonably be expected to be inferred by [F1an officer of Revenue and Customs] from information falling within paragraphs (a) to (c) above, or
(ii)are notified in writing to [F1an officer of Revenue and Customs] by the company or a person acting on its behalf.
(3)In sub-paragraph (2)—
“relevant return” means the company’s company tax return for the period in question or either of the two immediately preceding accounting periods, and
“relevant claim” means a claim made by or on behalf of the company as regards the period in question.
Textual Amendments
F1Words in Sch. 18 substituted (18.4.2005) by Commissioners for Revenue and Customs Act 2005 (c. 11), s. 53(1), Sch. 4 para. 68(a); S.I. 2005/1126, art. 2(2)(h)
F2Words in Sch. 18 substituted (18.4.2005) by virtue of Commissioners for Revenue and Customs Act 2005 (c. 11), s. 53(1), Sch. 4 para. 68(c); S.I. 2005/1126, art. 2(2)(h)
Modifications etc. (not altering text)
C2Sch. 18 para. 44(2)(3) applied by 1988 c. 1, s. 804ZC(6)(b) (as inserted (with effect in accordance with s. 87(3) of the amending Act) by Finance Act 2005 (c. 7), s. 87(1))
C3Sch. 18 para. 44(2)(3) applied (with effect in accordance with s. 31 of the amending Act) by Finance (No. 2) Act 2005 (c. 22), s. 28(6)
45U.K.No discovery assessment for an accounting period for which the company has delivered a company tax return, or discovery determination, may be made if—
(a)the situation mentioned in paragraph 41(1) or (2) is attributable to a mistake in the return as to the basis on which the company’s liability ought to have been computed, and
(b)the return was in fact made on the basis or in accordance with the practice generally prevailing at the time when it was made.
46(1)Subject to any provision of the Taxes Acts allowing a longer period in any particular class of case no assessment may be made more than six years after the end of the accounting period to which it relates.U.K.
(2)In a case involving fraud or negligence on the part of—
(a)the company, or
(b)a person acting on behalf of the company, or
(c)a person who was a partner of the company at the relevant time,
an assessment may be made up to 21 years after the end of the accounting period to which it relates.
(3)Any objection to the making of an assessment on the ground that the time limit for making it has expired can only be made on an appeal against the assessment.
Modifications etc. (not altering text)
C4Sch. 18 para. 46(2)(3) applied (28.7.2000 with application as mentioned in s. 63(4) of the amending Act) by 2000 c. 17, s. 63(1), Sch. 15 Pt. VI para. 62(3)
47(1)Notice of an assessment to tax on a company must be served on the company stating—U.K.
(a)the date on which the notice is issued, and
(b)the time within which any appeal against the assessment may be made.
(2)After that notice has been served on the company, the assessment may not be altered except in accordance with the express provisions of the Taxes Acts.
48(1)An appeal may be brought against any assessment to tax on a company which is not a self-assessment.U.K.
(2)Notice of appeal must be given—
(a)in writing,
(b)within 30 days after notice of the assessment was issued,
(c)to the officer of the Board by whom the notice of the assessment was given.
49U.K.The provisions of paragraphs 46 to 48 (assessments: general provisions as to time limits, procedure and appeals) apply to a discovery determination as they apply to an assessment.
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