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HMRC internal manual

Enquiry Manual

Companies: Groups: Consequential Amendments

FA98/SCH18/PARA 75

FA98/SCH18/PARA 76

Where a company has given consent to surrender amounts as group relief and an enquiry results in a reduced amount available for relief your conclusions should state the reduced amount. You should draw attention to the company’s obligation to withdraw as many of the notices of consent, or amend them to lesser amounts, as is necessary to bring the total amount surrendered within the new amount available for surrender.

You should ensure that the company complies with its obligations and that the consequences are reflected in necessary amendments, determinations or assessments made in respect of other companies in the group. The company has 30 days to send a copy of any new notice of consent to each company affected and to HMRC. A claimant company that receives a new notice of consent must amend its company tax return, so far as it may do so, so that it is consistent with the new position.

If a company fails to withdraw a notice or issue any new notices you can give such directions as you think fit as to which notices of consent are to be ineffective or are to have effect in a lesser amount. You must give such a direction by notice to the surrendering company, and at the same time send a copy of the notice to each claimant company affected.

You can make an assessment to tax if you discover that any group relief given has become excessive. Where a claimant company does not amend its return to reflect new amounts of group relief following the issue either of a new notice of consent by the surrendering company or a direction given by HMRC an assessment should be made.

Unlike the closure rules for an enquiry into a company tax return, there is no time limit for the issue of a notice of direction on a consent to surrender when a company fails to issue a new notice of consent within 30 days. But you should wherever possible aim to do this soon after expiry of the 30 day time limit for a company amendment.