Paul Brown v CIR: discussing collective knowledge

The concept of discovery has been in existence for over 200 years in one form or another and over that time it has been fundamental to the ability of the tax authorities to assess and collect tax where it is due.

Despite this some new aspects of the law continue to appear from time to time. TMA 1970 s 29 remains the key enactment. However this section does not give HMRC an open-ended power to raise an assessment. Taxpayers are protected by the time limits given in s 34 and s 36 for a valid assessment to be raised. Section 34 gives the normal limit of four years from the end of the year of assessment to which it relates. Section 36 extends this to six years where the taxpayer was careless and to 20 years where the loss of tax (income tax or capital gains tax)...