A taxpayer who made a careless error in a 2021/22 return filed on time is likely to be assessed under HMRC's discovery powers. By when can HMRC assess the extra tax for the 2021/22 tax year?
Answer and explanation
Correct answer: A. Within six years of the end of the tax year, so by 5 April 2028
- Step 1: Discovery assessment time limits depend on behaviour.
- Step 2: Careless error gives a time limit of six years from the end of the tax year.
- Step 3: The 2021/22 year ended on 5 April 2022, so the limit is 5 April 2028.
Answer
Within six years of the end of the tax year, so by 5 April 2028.
Why not the others: Four years applies where there is no careless or deliberate behaviour. Twenty years applies to deliberate behaviour. Twelve months is the normal window for opening an enquiry into a return, not the discovery limit.
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