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HMRC internal manual

Claimant Compliance Manual

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HM Revenue & Customs
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Discovery Decisions: SA Enquiries concluded by Contract Settlement

A person’s income tax liability is not revised for the purposes of S20(2) if there has been an SA enquiry which has been concluded by a contract settlement as, in these cases, a closure notice is not normally issued. The effect of this will be to prevent a discovery decision being made under S20(1). But you may still be able to make any necessary amendments to the entitlement for the year by opening an enquiry into that entitlement, as the absence of a notice closing the SA enquiry means that the SA enquiry window for that year remains open. As the NTC enquiry window is linked to the SA enquiry window (CCM12610), the NTC window will also be open unless an NTC enquiry has already been opened and closed for that year.

If you cannot make a discovery decision under S20(1), and the NTC enquiry window has closed, you will only be able to make any amendments which affect the entitlement for that year if you can make a discovery decision under S20(4), i.e. where there has been fraud or neglect (CCM13100). Where the SA enquiry has been concluded by contract settlement, this will mean that fraud or neglect has been established for the purposes of the SA enquiry. If the SA enquiry increased the amount of the income for that year, then you should normally assume that there has also been fraud or neglect for NTC, and you should make a discovery decision under S20(4). If you are in any doubt whether S20(4) applies, or if the claimant(s) objects to you making a formal discovery decision in these circumstances, you should refer the case to Legislative, Advice (B&C) for advice.