COM23010 - Assessing: CTSA assessments: amendments to returns
This subject is presented as follows.
Background
Amended return received through the CT Online Service
Amendment received on paper
Corporate Interest Restriction returns
Disclosure of tax avoidance schemes
Correction after recording taxpayer amendment
Amendment received while HMRC enquiry in progress
Amendment received after expiry of time limit
Background {#Background}
A company can make a taxpayer amendment to its return, including its self assessment, at any time within 12 months of the filing date (Word 42KB). The time limit is not extended if the return is delivered late. If it is delivered more than 12 months late, the company loses the right of amendment.
There is no statutory restriction upon the reasons for which a company may amend its return and self assessment. It may need to if, for example:
- the original return contained one or more estimated figures, when the final figure is established
- the company discovers an error in the information given in the original return
- the company wishes to make or amend a claim for relief which must be, or is capable of being, made in a return, and subject to the normal time limits for making or amending the relevant claim. For more information see COM52000 onwards.
A company must make any amendment to its return by notice to an officer of HM Revenue & Customs. HMRC does not prescribe the form and content of an amended return or provide an official form for amended returns. Companies and their agents can make an amendment by submitting an amended return through the CT Online Service or by sending a letter to the office dealing with their case.
HMRC can enquire into an amended return in the same way as an original return. However, if the time limit for enquiring into the original return has passed, the scope of any enquiry must be limited to matters relating to or affected by the amendment itself. Any query about the amendment must be handled outside COTAX.
Amended returns are normally reviewed by a CT Co-ordinator or Technical Caseworker.
Amended return received through the CT Online Service
When a company submits an amended return electronically, COTAX processes it whenever possible and issues an acknowledgement of the taxpayer amendment.
Note: Where a company has an agent and the Registered Office address of the company is the same as the agent’s address, only the company receives the acknowledgement of the amendment.
When the amendment cannot be automatically processed, the case appears on AEFL (Amended E-Filed Work List) for review. You must use the ‘record taxpayer amendment option’ in function RAMA (Record / Amend Assessment) to process the amendment. However, if the AP is under enquiry, you should ask the enquiry caseworker to deal with the amendment.
Before and after recording the taxpayer amendment you must use function TAXW (View Taxpayer Work Lists) to find any open work list entries that need to be cleared.
If you correct the figures shown in the amended return, you must indicate that on screen COT121G so COTAX issues the correct assessing output (Word 46KB).
When you have completed the function, COTAX:
- records the taxpayer amendment
- issues an acknowledgement to the company if you have accepted the figures on the amendment
- issues a correction notice if you made corrections
- includes a payslip with the output where tax is outstanding
- deals with any overpayment which results from the amendment by reallocating the money to any outstanding liability on the COTAX record and repaying any balance
- if it is inhibited from making automatic repayments or reallocations, it puts the case on the Overpayments Review List (LOPU) or Overpayments List (LOPD)
- gives you options, where appropriate, to deal with any late-filing penalties.
Amendment received on paper
If you receive a valid paper amendment to a return, you should treat it in the same way as an amended return received through the CT Online Service when COTAX has not been able to process it automatically.
Corporate Interest Restriction returns {#}
Any group companies with net financing costs of more than £2million per annum may be required to submit a Corporate Interest Restriction return. However, when reviewing amended returns, if it does not indicate that it gives effect to a Corporate Interest Return check if any of the following indicators are shown:
- Non Trading Loan Relationship amounts
- Non Trading Derivative Contract amounts
- Finance Lease Deductions
- Debt Factoring
- Service Concession Arrangements
Or
A CIR related election is included with the amended CT600 tax return subject to any referral being required for the election. For example a para 68 SCH7A TIOPA 2010 election must be made in an amended return
before you process the amended return.
Disclosure of tax avoidance schemes
Companies that use disclosable tax avoidance schemes (Word 28KB) must notify HMRC about them on the CT600 return form and provide the details on the CT600J (disclosure of tax avoidance schemes) supplementary page.
Those details are processed onto COTAX automatically when the return is received from the CT Online Service.
A company may notify HMRC of a tax avoidance scheme as part of an electronic or paper amendment to its return. The electronic amendment appears on AEFL because it has a supplementary page.
Whether the amendment is received electronically or on paper, you must use function MAPS (Maintain AP Signals) to enter the avoidance scheme details using the [Risks] button.
If the amendment has not been processed onto COTAX, you must also use function RAMA to record the taxpayer amendment.
Correction after recording taxpayer amendment
HM Revenue & Customs has the same power to correct obvious errors in an amended return as it does in relation to an original return. See COM23050 for more information. The time limit for correcting an amended return is nine months from the date the amendment is made.
If you find that there is an obvious error in a return after the taxpayer amendment has been recorded and the time limit for making corrections has not passed, you can use the ‘correct a return’ option in function RAMA to issue a correction notice.
Amendment received while HMRC enquiry in progress
If a company amends its return while it is under HMRC enquiry, the amendment does not restrict the scope of the enquiry, but may be taken into account together with any matters arising in the enquiry. Any change to the tax charge, and any group relief consequences of the amendment, only become effective once the enquiry is closed. See COM71020 for further guidance.
If you receive an amendment during the course of an enquiry, note it and keep the correspondence in a prominent place in the papers but do not amend the self assessment figures on COTAX.
If you use function RAMA (Record / Amend Assessment) while an enquiry is in progress, COTAX only gives you the options to issue a closure notice or make a jeopardy amendment. You must not use either of these options to try to record the taxpayer amendment.
For more information see COM71000 onwards.
Amendment received after expiry of time limit
The CT Online Service does not allow an amendment to be submitted if the time limit has passed.
If you receive an amendment on paper outside the Para 15 Sch 18 FA 98 time limit, you need to tell the company why it cannot be accepted. If an amendment reveals additional liability not reflected in the original self assessment and the time limit for opening an enquiry has expired, the tax can be brought into charge by issuing a discovery assessment. See COM23070 for more information.
If the amendment indicates it gives effect to a Corporate Interest Restriction (CIR) return the time limit is extended in line with provisions made under FA 2018 and guidance on how to treat these amendments is at COM131012.
When you have used Function RAMA to make an amended assessment, you cannot alter it before it is issued or stop its issue.
You must not make an amended assessment for a company that has been struck off.
Voluntary Disclosure {#}
Voluntary Disclosures can be made using the Digital Disclosure Service portal on Gov.Uk and detailed information about this can be found here: https://www.gov.uk/government/publications/hmrc-your-guide-to-making-a-disclosure/your-guide-to-making-a-disclosure
Occasionally companies will still write to HMRC with information about a voluntary disclosure. This work is now ring-fenced and should be referred to Mid size Customer Engagement Team
See: