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HMRC internal manual

Enquiry Manual

Concluding the Enquiry: Introduction

When concluding an enquiry the course of action to take will depend on whether you are able to reach an agreement over the additional amounts of tax and any penalties that are due.

When you have agreed both the tax and any penalties

When you have agreed the tax and any penalties, before you conclude the enquiry, either formally or by way of a contract settlement, you must consider whether you require

  • a statement of assets and liabilities EM3805
  • a certificate of disclosure EM3810.

If penalties are not involved and you have an open SA enquiry, you should normally proceed using the statutory provisions at EM3830+.

Exceptionally there will be occasions, for example when we have received payments on account, where you can agree a contract settlement that includes only tax and interest. If so, make sure that you remove any references to penalties from the letter of offer.

For guidance about concluding an enquiry by contract settlement, see EM6000+.

When you cannot agree either the tax or penalties

Where any dispute arises, or you reach an impasse, you should first consider whether Alternative Dispute Resolution (ADR) may help you and the taxpayer resolve these. See the ADR web pages for guidance about ADR.

Tax but no penalties

When you cannot agree the tax position and penalties are not involved, you should proceed formally following EM3830+.

If you then receive an appeal against the tax, you should continue to seek agreement following the appeals guidance at ARTG2210.

Tax and penalties

When penalties are involved, you should continue to try to reach an agreement about both the tax and penalties. You can still agree a contract settlement at any stage before the tax and penalty assessments become final.

If you cannot reach an agreement, you should follow the guidance appropriate to the specific circumstances.

  1. See EM1975+, if a taxpayer’s application for a closure notice has resulted in a tribunal direction.
  2. See EM5207+, if a taxpayer has not co-operated with the enquiry and information powers have been exhausted, or despite ongoing discussions with the taxpayer you are unable to agree a contract settlement and have to follow the formal route to conclude your enquiries.

All notices relating to Income Tax, Capital Gains Tax or Corporation Tax enquiries must be in writing, see EM0075.