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HMRC internal manual

Compliance Handbook

From
HM Revenue & Customs
Updated
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Information & Inspection Powers: Information Notices: Taxpayer Notice: Self assessment, stamp duty land tax, annual tax on enveloped dwellings or bank payroll tax return made

Where a person (including a partnership) has made a Self Assessment return for a chargeable period, see table below, you can only issue a taxpayer notice to check the income tax or capital gains tax position for that period if

  • there is an Open enquiry into the Self Assessment return, or
  • there is a potential Discovery assessment position for income tax or capital gains tax
  • the notice is given to obtain any information or document that is also required for the purpose of checking that person’s position regarding another tax, or
  • the notice is given to obtain any information or document that is required or also required for the purpose of checking that person’s position regarding any reductions or repayments of tax or withholding income (FA08/SCH36/PARA64 PAYE etc).

Similar conditions apply to a corporation tax position where a person has made a CTSA return and to a bank payroll tax position where a person has made a bank payroll tax return.

Where a person (including a partnership) has made a Stamp Duty Land Tax return, or a return for annual tax on enveloped dwellings, for a chargeable period, see table below, you can only issue a taxpayer notice to check the tax position for that period if

  • there is an open enquiry into the return,
  • there is a potential discovery assessment position for that tax, or
  • the notice is given to obtain any information or document that is also required for the purpose of checking that person’s position regarding another tax.

Open enquiry

An enquiry is open if a notice of enquiry, see the table below, has been issued and a closure notice, see the table below, has not yet been issued.

  Chargeable period means Notice of enquiry means Closure notice means
       
Income tax & capital gains tax an income tax year a notice issued under TMA70/S9A or TMA70/S12AC  
a notice issued under TMA70/SCH1A,PARA5 a notice issued under TMA70/S28A or TMA70/S28C
a notice issued under TMA70/SCH1A/PARA57      
  Corporation tax an accounting period a notice issued under FA98/SCH18/PARA24
a notice issued under TMA70/SCH1A/PARA5 a notice issued under FA98/SCH18/PARA32
a notice issued under TMA70/SCH1A/PARA57        
  Stamp duty land tax the day of the land transaction a notice issued under FA03/SCH10/PARA12 a notice issued under FA03/SCH10/PARA23
  Annual tax on enveloped dwellings the period beginning with 1 April 2013 and ending 31 March 2014, and every subsequent 12 months beginning 1 April a notice issued under FA13/SCH33/PARA8 a notice issued under FA13/SCH33/PARA16
  Bank Payroll Tax the period beginning on 9 December 2009 and ending on 5 April 2010 a notice of enquiry issued under FA10/SCH1/PARA23 a notice issued under FA10/SCH1/PARA23

Discovery assessment position

There may be a potential discovery position if

  • there is reason to suspect, see CH23560, that

    • tax may not have been assessed, or
    • tax may have been under-assessed, or
    • tax relief given may be excessive

and

  • if the suspicion turned out to be true you could correct the tax position.

In order to correct a tax position by discovery assessment one of two conditions must be met. EM3200 provides full details.

FA08/SCH36/PARA21

FA08/SCH36/PARA21A - 21B

TMA70/S29 (4) & (5)

FA98/SCH18/PARA42 - 44

FA10/SCH10/PARA25