Discovery assessments: Catch up with the latest changes
Discovery assessments look set to be applied to the High-Income Benefit Charge under new legislation set out by the Government.
A loophole regarding discovery assessments and the charge was brought to light following the case of HMRC V Mr Wilkes last year.
The case saw the Upper Tribunal agree that the assessment for the High-Income Child Benefit Charge (HICBC) was not validly raised, following the HMRC appealing an earlier decision in Mr Wilkes’ favour.
HMRC are now appealing the decision to the Court of Appeal, but the case has had an impact on tax legislation in a bid to close the loophole.
Ahead of the appeal, part of the Finance Act 2022 includes plans to change the discovery provisions retrospectively so they can now be applied to collect any underpayment of the High-Income Benefit Charge.
HMRC says the move will provide certainty that HMRC may recover HICBC through the issue of a discovery assessment.
So, are you aware of discovery assessments and the High-Income Benefit Charge? Make sure you brush up as the measure is introduced.
What is a discovery assessment?
A discovery is a power held by HMRC to reopen closed periods if they believe there has been an underpayment of tax. They will then issue an assessment for the tax they think has been underpaid.
What it means for the High-Income Benefit Charge
The High-Income Benefit Charge is a tax charge for any individual who earns over £50,000 and either they or their partner receive Child Benefit or someone else gets Child Benefit for a child living with the individual.
The new rules clarify that those who are liable to pay the charge must notify HMRC, or risk HMRC recovering HICBC through the issue of a discovery assessment.
It is stressed on the government’s website that the measure “does not introduce any new or additional obligations or liabilities; it simply maintains the widely accepted and understood position that existed until recent litigation called this into question.”
Are you worried about a discovery assessment? For expert advice on related matters, do not hesitate to get in touch today.
Leave a Reply
Cancel reply
Leave a Reply
Social
Recent Posts
- Double cab pickups to be taxed as company cars as Government confirms U-turn
- How to ease the pressure within your business this Stress Awareness Day
- What the Autumn Budget 2024 means for SME owners
- Why regular financial forecasting is so important
- How to expand your business without financial strain
Archives
- November 2024
- October 2024
- September 2024
- August 2024
- July 2024
- June 2024
- May 2024
- April 2024
- March 2024
- February 2024
- January 2024
- December 2023
- November 2023
- October 2023
- September 2023
- August 2023
- July 2023
- June 2023
- May 2023
- April 2023
- March 2023
- February 2023
- January 2023
- December 2022
- November 2022
- October 2022
- September 2022
- August 2022
- July 2022
- June 2022
- May 2022
- April 2022
- March 2022
- February 2022
- January 2022
- December 2021
- November 2021
- October 2021
- September 2021
- August 2021
- July 2021
- June 2021
- May 2021
- April 2021
- March 2021
Categories
- Accountancy
- Accounting
- Agriculture
- Apprentices
- Asset and Wealth Management
- Ben Allen
- Blog
- Blogs
- Bookkeeping
- Brexit
- Budget
- Business
- Business Advice
- Business Advice News
- Business Blog
- Business News
- Business Start-ups
- Capital Allowances
- Cash Flow
- Cash flow management
- Charities
- Corporate Tax
- Corporation Tax
- Covid-19 Home working and expenses
- Economy
- Employees
- Employment
- Employment and payroll
- Family Businesses
- Finance
- Financial News
- Financial Planning
- Fraud
- Funding
- Government Funding
- Grants
- Guide
- HMRC
- Home working and expenses
- Income Tax
- Inflation
- Inflation / Interest Rates
- Inheritance
- Insurance
- Investment
- Latest Business News
- Latest News
- Legal
- leisure and hospitality
- Loans
- Making Tax Digital
- Money
- MTD
- News
- PAYE
- Payroll
- Pension
- Pensions
- Personal Tax
- Personal taxes and finances
- Property
- Property News
- R&D
- Redundancy
- Scam
- Self Assessment
- Self Employed
- SME
- SMEs
- SMEs / Business
- Start ups
- Tax
- Tax Blog
- Tax News
- Tax Planning
- Tourism
- Uncategorized
- VAT
- VAT and MTD
- VAT deferral
- Wages
- Wealth Management