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HMRC internal manual

Enquiry Manual

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HM Revenue & Customs
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Partnerships: Discovery Provisions: Protective Amendments

TMA70/S30B(2)

Although normally amendments to the partners’ self assessments will be made once the partnership return is finalised the legislation does not prevent you amending the partnership return EM7101 and making the consequential amendments to the partners’ self assessments before that time, or even at the same time as you amend the partnership return.

Where the normal time limit for making consequential amendments is about to expire you should consider the need to protect the position of HMRC by amending the partnership return under Section 30B(1). You should ensure that you make the consequential amendments to the partners’ self assessments within the normal time limit to keep the matter open until enquiries are completed. That may mean in these circumstances that you take action under Section 30B(1) and Section 30B(2) simultaneously.

You should estimate the amount of the discovery amendment to the best of your ability, having regard to all the available facts and giving HMRC the benefit of any doubt. But you should avoid disclosing knowledge held by HMRC of a concealed source of partnership income in the amendment as the partners, when eventually challenged, might limit their disclosure to matters directly connected with that source.

As there is no right of appeal against a consequential amendment, nor any right to postpone payment of the additional tax arising, you should discuss with the partners what level of payment on account would be appropriate. But you should informally stand over collection of the additional tax charged, which is agreed not to be due, until the partnership return is final.