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Discovery assessments were made to HMRC’s best judgement but disclosure was unprompted

By Mark McLaughlin, October 2024

Discovery assessments of undeclared rental income based on estimated income and expenditure were made to HMRC’s best judgement, but the appellant’s contact with HMRC’s let property campaign constituted an unprompted disclosure. 

On 2 January 2014, HM Revenue and Customs (HMRC) opened an enquiry into the appellant’s tax affairs. HMRC had information that the appellant had purchased four properties in addition to his residence. HMRC’s enquiry letter stated that it believed the appellant had received undeclared rental income. The appellant was asked for information including statements of income and expenses for each relevant tax year. Despite extensive correspondence with HMRC, the appellant did not provide the information requested, even though HMRC eventually issued formal information notices and subsequently charged penalties for non-compliance. 

HMRC wrote to the appellant, pointing out his failure to provide

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