Only if the enquiry window is still open in respect of the last return received must HMRC start a formal enquiry. Otherwise, they will use their information powers and the discovery provisions to make their compliance check. The discovery powers are used, for example, when third party information does not reach HMRC before the statutory enquiry window closes. Under FA 2008, Sch. 36, para. 21(6) information can be requested in respect of historic, closed years if HMRC have reason to suspect that an amount of tax which ought to have been assessed may not have been assessed, that an assessment has, or may have, become insufficient or that a relief from tax may be or has become excessive.

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