As part of the self-assessment procedure, the current system in which each source of income is the subject of a separate assessment will be abolished.

Income will still be calculated by reference to the existing sources -- eg schedu le D, cases I and II -- but there will be a single assessment incorporating all sources of income and capital gains.REVENUE ASSESSMENTSelf-assessment is not compulsory.

The taxpayer is allowed to leave the computation of tax liability and the making of the assessment to the Revenue provided a return is submitted by 30 September following the year of assessment.

There is no investigation of that information.

If the return is filed out of time, and without any self-assessment, the Revenue may also make an assessment, although it is then not obliged to base it on the return figures.

The taxpayer is sent a copy of the assessment which is treated as a self-assessment.REVENUE DETERMINATIONWhere a taxpayer fails to submit a return, the Revenue may make a determination of the tax liability to the best of its information.

Such determination may be superseded by a later self-assessment, whether it is an actual self-assessment or one calculated by the Revenue (see above).

Any determination will automatically be displaced by the submission of an outstanding return.AMENDMENTS TO SELF-ASSESSMENT/REPAIRSWithin 12 months of the filing date, a taxpayer may amend his or her return and self-assessment -- known as a 'repair'.

This will permit mistakes to be corrected or estimates to be substituted with a final figure.

Where additional tax is due, interest will be payable, but generally penalties will not be exacted.

The Revenue is equally permitted to repair a return where, eg a computer scanner or a Revenue officer making a cursory check picks up an arithmetical error.In such cases, within six months from the filing date, the Revenue may correct the error by amending the self-assessment.

If the taxpayer disagrees with the Revenue amendment he or she may submit a revised self-assessment.

If this does not accord with the Revenue's view, it may open a formal enquiry into the return.REVENUE ENQUIRY POWERSSelf-assessment represents a 'process now -- check later' system.

At the initial routine processing stage, the Revenue will only check the return to the extent of correcting any obvious errors.

Until the following 31 January from the filing date, it will have the freedom to make an enquiry into any tax return without justification.

While some returns will be selected for enquiry on a random basis, the majority of enquiries will be directed to cases where the return indicates a possible discrepancy or other information has come into the Revenue's possession.

These enquiries can be limited to defined areas or they can be fully comprehensive.

The Revenue is given extensive powers to obtain information from the taxpayer, in particular to obtain whatever documents it considers appropriate.

This comprehensive enquiry procedure may provide the balance to the taxpayer's ability to self-assess without reference to any judgment of the Revenue.Upon completion of its enquiries, the Revenue must issue a notice to the taxpayer, stating its conclusions as to the proper amount of tax due.

The taxpayer may amend the self-assessment in the light of such notice.

Otherwise, the Revenue may amend the assessment, with the taxpayer having the right of appeal to the commissioners.

During the course of the enquiry the taxpayer has the right of appeal to the commissioners against any notice to produce documents.

He or she may also apply to the commissioners to bring the enquiries to an end.

The Revenue has similar rights of enquiry into the validity of claims by taxpayers.DISCOVERY AND FINALITYThe Revenue enquiry powers generally come to an end 12 months from the 31 January filing date, after which a taxpayer's liability for a particular year is final and conclusive and cannot be reopened.

The position only alters if the Revenue is permitted to make a discovery assessment.

Previously, the Revenue's discovery powers were derived from a combination of statute, practice and case law.

These have been replaced by new statutory rules which, in the Revenue's view, embody the principles laid down in Olin v Scorer [1982] 52 TC 592.

For a taxpayer to avoid the possibility of a discovery assessment, the disclosure of a particular point has to be sufficiently full and clear to give an inspector notice of precisely what issues need to be considered and the stance taken on them.The Revenue may raise a discovery assessment to make good a loss of tax only if one of two alternative conditions are satisfied.

First, if the loss of tax is the result of fraudulent or negligent conduct by the taxpayer or representative and, secondly, when a Revenue officer ceased to be entitled to enquire into a return, he could not reasonably have been expected to be aware of the tax deficiency on the basis of the information made available to him.

Information is treated as made available if it is contained in the taxpayer's tax return or in any accounts, statements or documents accompanying the return, for the chargeable period in question and the two preceding periods.This area of discovery is likely to be a cause of controversy and a source of potential litigation.

In the case of taxpayers carrying on a trade or profession, it would be advisable for accounts and relevant documents to be submitted in a comprehensive form, with the information drawing attention to potential grey areas.

Relying only on standardised accounts information might be inadequate.