Finance (No. 2) Act 2023

Part 8 Discovery assessments

27 (1) If, in respect of an accounting period, an officer of Revenue and Customs discovers that—

(a) an amount of multinational top-up tax that ought to have been assessed in respect of a multinational group has not been assessed, or

(b) an assessment to tax is or has become insufficient,

the officer may make an assessment (a “discovery assessment”) in the amount which ought in the officer's opinion to be charged in order to make good to the Crown the loss of tax.

(2) This is subject to the restrictions in paragraph 28.

28 (1) This paragraph applies where the filing member of the group has submitted a self-assessment return under paragraph 13 for the accounting period in respect of which the officer makes a discovery assessment.

(2) Where this paragraph applies, the power to make a discovery assessment—

(a) may only be made in the two cases specified in sub-paragraphs (3) and (4), and

(b) may not be made in the circumstances specified in sub-paragraph (6).

(3) The first case is where the situation mentioned in paragraph 27(1) was brought about carelessly or deliberately on the part of—

(a) a member of the group of which the person forms part, or

(b) a person acting on behalf of a member of the group.

(4) The second case is where an officer of Revenue and Customs, at the time the officer—

(a) ceased to be entitled to give a notice of enquiry into the return submitted in respect of the group for the accounting period, or

(b) completed an enquiry into the return,

could not have been reasonably expected, on the basis of the information made available to the officer before that time, to be aware of the situation mentioned in paragraph 27(1).

(5) For this purpose information is regarded as made available to the officer of Revenue and Customs if—

(a) it is contained in a self-assessment return, an information return, an overseas return notification or a below-threshold notification for the accounting period in question or either of the two immediately preceding accounting periods,

(b) it is contained in any documents produced or information provided by the filing member for the purposes of an enquiry into any such return or notification, or

(c) it is information the existence of which, and the relevance of which as regards the situation mentioned in paragraph 27(1)—

(i) could reasonably be expected to be inferred by the officer of Revenue and Customs from information falling within paragraph (a) or (b), or

(ii) are notified in writing to an officer of Revenue and Customs by the filing member or another person acting on the filing member's behalf.

(6) No discovery assessment may be made if—

(a) the situation mentioned in paragraph 27(1) is attributable to a mistake in the return as to the basis on which the tax liability ought to have been calculated, and

(b) the return was in fact made on the basis or in accordance with the practice generally prevailing at the time it was made.

29 (1) The general rule is that no discovery assessment may be made more than 4 years after the end of the accounting period to which it relates.

(2) A discovery assessment in a case involving a loss of tax brought about carelessly by a member of the group (or a person acting on their behalf) may be made at any time not more than 6 years after the end of the accounting period to which it relates.

(3) A discovery assessment in a case involving a loss of tax brought about deliberately by a member of the group (or a person acting on their behalf) may be made at any time not more than 20 years after the end of the accounting period to which it relates.

(4) A discovery assessment in a case involving a loss of tax brought about as a result of a failure of a filing member to register with HMRC under paragraph 6 may be made at any time not more than 20 years after the end of the accounting period to which it relates.

30 (1) The officer of Revenue and Customs must give notice of a discovery assessment to the filing member.

(2) The notice must state—

(a) the tax due,

(b) the date on which the notice is issued, and

(c) the time within which any appeal against the assessment must be made.

(3) After notice of the assessment has been served under this paragraph, the assessment may not be altered except as provided for by or under this Schedule.

(4) Where an officer of Revenue and Customs has—

(a) decided to make an assessment to tax, and

(b) taken all other decisions needed for arriving at the amount of the assessment,

the officer may entrust to another officer of Revenue and Customs the responsibility for completing the assessing procedure, whether by means involving the use of a computer or otherwise, including responsibility for serving notice of the assessment.