How to do a compliance check: dealing with a lack of cooperation
If cooperation is withdrawn because there is a dispute, follow the guidance at CH280500.
Where someone does not cooperate because they have a disability you must make reasonable adjustments to make sure they are not disadvantaged by their disability, see COG11345.
Otherwise, if the person has failed to provide information you have asked for, despite repeated attempts to contact them to discuss what you need and why, you should review your findings so far and decide whether
- you have enough information to assess the tax, or, in direct tax cases, close the enquiry. (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
- use or further use of information powers and charging penalties for non-compliance with an information notice is likely to result in production of the information requested
- the information could be obtained from a third party
- you have enough evidence to establish that a penalty is or isn’t payable
- information powers can be used to try to obtain information to establish the penalty position and provide evidence of the behaviour, see CH402650
- the use of information powers and charging penalties for non-compliance with an information notice, even where you think the person may not comply, will help you establish that the person has demonstrated a careless attitude to the compliance check which could help a tribunal come to a conclusion that the inaccuracy or overstated repayment claim was at least careless.
Where you have enough information to establish the unpaid tax and have taken steps to establish the penalty position, you should:
In direct tax enquiries, follow the guidance at EM5207.
In all other cases
- decide whether or not to charge a penalty and, if so, the evidence you have to support your view of behaviour and then
- get authorisation for your decision to charge a penalty or your view that it is not possible to get evidence of behaviour or it is not cost-effective to put effort into trying to do so.
If you have sufficient evidence to establish that a penalty is payable and your decision has been authorised, you must
- send a letter setting out your findings on the tax position and informing the person that you intend to assess the tax or close the enquiry and assess a penalty or penalties
- enclose the NPPS100(S) Penalty Explanation Schedule
- wait 30 days and then amend the return or issue a tax assessment and any penalty assessment.
If you have not been able to obtain enough evidence to charge a penalty and your authorising officer has agreed you can close the case without charging a penalty, you must
- send a letter setting out your findings on the tax position and informing the person that you intend to assess the tax
or, in direct tax cases
- close the enquiry if no further information is received within 30 days.