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HMRC internal manual

Enquiry Manual

Partnerships: Opening an Enquiry: Obtaining Information






Your request for information will be to the nominated partner as part of your opening letter EM1550+. Where the information is not provided you would need to issue a formal notice, see CH23000+. You should note in particular that the only documents which you can require the nominated partner to produce are those which are in his power or possession in his capacity as nominated partner.

So, although for example you may require details of the private bank accounts of the partners in order to test the accuracy of the partnership return, you cannot issue a taxpayer notice, see CH23500+, directed to the nominated partner for the other partners’ bank account details. They are not in his power or possession although his own bank account details will be.

Normally, when you undertake a full enquiry into a partnership return you will open a separate Section 9A enquiry into the return of each partner whose return presents a clear risk of its own. Where an enquiry has been opened into a partner’s return you should use that as the basis for a taxpayer notice to obtain personal financial information needed for your partnership enquiry where possible. However, that may not be practical because the risks present in the personal return are not sufficient to reasonably require its production, or there is insufficient overlap of the partnership accounting period and year of assessment, or the partner is unlikely to agree to his or her personal affairs being disclosed to other partners. In such cases a third party notice, see CH23600+, is the appropriate statutory power for requesting partners’ private financial details for the partnership enquiry. Further operational guidance is available at CH225540+.

All enquiry work, however, is undertaken on the basis that the taxpayer must be given the opportunity to supply the required information voluntarily so you should give the partners an opportunity to do so before resorting to formal powers. Where private financial information is needed to check the partnership return you should first ask the nominated partner to ask the partners to supply it voluntarily.

The responsibility for complying with a taxpayer or third party notice issued in respect of a Section 12AC enquiry is that of the partner to whom the notice was given.

If that partner fails to comply, or fails to comply fully, they alone will be liable to a standard penalty of £300 CH26640. If the failure continues daily penalties may become due CH26660.

The other partners cannot be liable to a penalty in respect of a partner’s failure. This is consistent with the fact that each partner can only be required to produce documents in his or her power or possession.