In the latest Finance Bill hearing in the House of Lords, financial secretary to the Treasury Lucy Frazer confirmed that the extension of powers will be included in the Bill, which is going through the parliamentary approval process prior to Royal Assent.

‘The tax administration provision provides certainty that HMRC can use discovery assessments,’ said Frazer. The clause in the Finance Bill has been introduced as a result of the recent Upper Tribunal ruling on Wilkes v HMRC which found that HMRC did not have the powers to recover higher rate child benefit charges through the use of a discovery assessment.

‘HMRC uses discovery assessments frequently in the case of taxpayers that have not completed a self assessment, if tax has been understated or not submitted at all,’ Frazer said.