EM1545 - Opening the Enquiry: 'Discovery' Investigation Unavoidable

Where the information received in respect of an earlier year relates to what appears to be a one-off source, for example, a capital gain, it will usually be more appropriate to open a discovery investigation, as it is unlikely that making an SA enquiry into a later year will naturally lead into the earlier year. But there can be no hard and fast rules. You will need to arrive at a judgement based on the circumstances of each individual case, bearing in mind the advantages and disadvantages of the two options EM1540.

Where SA return is not currently open and no further returns are expected (for example, because the taxpayer has ceased self employment and become an employee who is not within SA) the only option will be to pursue the issue under the discovery provisions EM3250+.

For periods to which SA does not apply

• an officer of HO grade or above has a continuing obligation under TMA70/S29 (old) to make an assessment accordingly if they are satisfied that a return (including the accounts and computations) is correct and complete
• it remains necessary for the officer of HO grade or above to show grounds for dissatisfaction with the return before starting an investigation into the taxpayer.