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HMRC internal manual

Enquiry Manual

HM Revenue & Customs
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Partnerships: Concluding Enquiries: Legislative Framework


When concluding enquiries it is important to remember that partners and partnerships are each required to submit a return and that the two sorts of returns are separate and distinct. The procedures for settling enquiries into the different returns have many similarities but there are some differences as the partners are liable to pay any additional duties whereas the partnership does not have liability.

When you find something wrong with the partnership return, consequential adjustments must be made to the partners’ returns to give effect to the amendments made to the partnership statement (TMA70/S28B(4)). Those adjustments may then have an affect on the self assessment of the partners.

You should formally conclude the partnership enquiry by issuing a closure notice (TMA70/S28B(1)) even where the enquiry is concluded by a contract settlement with each relevant partner.

The closure notice must state your conclusions and say whether or not, in your opinion, the return requires amendment. If amendment is needed, the notice must detail the amendments that will give effect to your conclusions (TMA70/S28B(2)). EM7203 

The nominated partner has the right of appeal against any HMRC conclusion or amendment in the closure notice.

Once the partnership enquiry has been concluded you must make any consequential amendments to the partners’ returns as directed by TMA70/S28B(4). The action needed will depend on whether

  • the enquires into the partners’ returns are “deemed” enquiries by virtue of TMA70/S12AC(6) or separate S9A enquiries, and
  • you intend to reach a contract settlement with each partner.

The returns of the partnership and the partners are closely linked. If there are separate case owners they should maintain good communication with each other. Action on one enquiry could impact on and prejudice the opening or working of another enquiry. For example, you should not formally conclude a S9A enquiry into a partner’s return, while either the partnership enquiry is ongoing or the partnership enquiry window is still open, without the agreement of the partnership case owner.

If a late appeal by the nominated partner is accepted, it is likely that you will have already made the adjustments to the individual partners’ self assessments EM7205. You cannot undo this. The amendments will simply have given effect to the position shown in the partnership return, reflecting the statutory position. In these situations you should informally stand over collection of the additional tax and NIC brought into charge on each partner’s self assessment so far as it is in dispute, pending determination of the appeal.

EM7202 gives some examples of the action that may be needed to conclude the enquiries into the partnership return and those of the partners. See also EM7210 and EM7215.