Mark McLaughlin looks at HMRC’s use of the ‘presumption of continuity’ when assessing additional income for periods other than the period of enquiry.
In tax return enquiries and investigations, where income or profits have been understated it is not uncommon for HMRC to assess additional tax not only the period under review, but also other periods based on the same understatement.
For example, a cash-based business owner who has understated turnover might find that HMRC assesses earlier (and/or later) tax years on the assumption that the individual understated their self-employment income in those other tax years as well.
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