Taxation of general insurance: funded accounting: CTSA enquiry windows
In the example in GIM4160 the accounts should be submitted by 31 December 2007. This is part way through the enquiry window. The CTSA rules do not specify the format of an amended return, and an amendment may come in the form of a letter or revised computation, or simply the accounts themselves. As part of risk assessment procedures it should be ensured that where an enquiry has been opened into the original return it is not closed before the submission of the amended return. Alternatively, in normal circumstances the final date for enquiry is two years from the date of replacement of the technical provision, in this case by 30 April 2009. FA98/SCH18/PARA85 (2) allows HMRC to enquire into the whole return, not just the amendment.
FA98/SCH18/PARA27 is the normal route for obtaining information about the replacement technical provision if these details were not submitted. The officer can make a reasonable assumption about the date on which the technical provision was replaced. In practice it would be necessary to open an enquiry to ascertain this information.
If no enquiry has been opened, and there has been a replacement of the technical provision but no amendment has been made to the company’s return before the expiry of the enquiry window, the officer will be able to make a discovery assessment. However, the use of funded accounting should have been taken account of in risk assessing the original return. The return should be reviewed again before the expiry of the relevant enquiry time limits.
Where the original return is delivered later than two years after the date of the replacement of the technical provision FA98/SCH18/PARA85 (3) allows the extended enquiry window in FA98/SCH18/PARA24 (3) to apply. This extended enquiry window stays open up to and including the quarter day next following the first anniversary of the date the return was delivered.
In general the determination provisions of FA98/SCH18/PARA36 are not likely to be relevant as a return should have been delivered for the relevant accounting period. All that is required is an amendment to finalise matters. If no return has been made the officer has the same powers to make a determination as in any other case.