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HMRC internal manual

Enquiry Manual

Partnerships: Concluding Enquiries: Consequential Amendments

TMA70/S8(1B)
TMA70/S8(1C)
TMA70/S28B(4)

There is no statutory right of appeal available to partners in respect of the consequential amendments to their self assessments arising from amendments to the figures in the partnership return. But a partner may object to the amendment you have made to their self assessment on the grounds that it is incorrect because of a mistake in your computation. If you have made a mistake then you should put it right.

In most instances it will be advisable to delay making the amendments to the self assessments of the individual partners until the partnership statement becomes final either as a result of

  • the absence of an appeal within the 30 day limit, or
  • determination of an appeal against the conclusions or amendments of HMRC, whether by agreement or by the tribunal.

However, there will be cases where it may be necessary to make the consequential amendments before the partnership statement becomes final. For example, should you need to make penalty determinations in respect of penalties to be imposed under TMA70/S95A and/or penalty assessments in respect of penalties to be imposed under FA07/SCH24 and the amendment to the partnership statement is under appeal, it may be best to make the consequential amendments at the same time as the penalty determination and/or penalty assessment. That will allow all appeals to be heard at the same time thereby saving resources for both HMRC and the taxpayer.

Early consequential amendments may also be appropriate where, specific matters relating to the partnership return have been concluded and a partial closure notice has been issued under TMA70/S28B(1A). However, it will be advisable in most cases to delay making the consequential amendments until the amendments made in the partial closure notice under s28B(1B) have become final.

The number of partners will be a major factor in deciding what action to take and where there is a significant number of partners you may decide to wait until the partnership statement is finalised in full.

Once the figures in the partnership return are final amendments to the partners’ self assessments should be made. This ensures the consistent link between the figures in the partnership return as amended (including the amended amounts allocated to each partner) and the figures in the partner’s self assessment is maintained.

You must issue the relevant notice, which is available in SEES, and you should include a computation to show how the amendment to the self assessment has been arrived at, as you would when making an amendment to a self assessment under any other circumstances.

If you cannot agree the computational effect of an amendment made under section 28B(4) with the taxpayer or agent submit your papers with a brief note of the point(s) of conflict to the technical specialist within BAI.

You should consider opening enquiries into the partners’ personal returns where the partnership enquiry covers the disposal of partnership assets EM7015. Similarly, in other circumstances where the computational effect of an amendment to the partnership statement is likely to be complex or you suspect it may lead to dispute you should consider the need to open enquiries into the partners’ personal returns.

The taxpayer may wish to make or amend one or more claims or elections as a result of the Section 28B(4) amendment. Subject to the normal rules and time limits applying to each claim or election, you may be able to give effect to them either at the same time as making the amendment, or afterwards. Whatever course you take you should ensure that you make clear to the taxpayer what amendments you are making to his or her self assessment and why.