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HMRC internal manual

Inheritance Tax Manual

Co-operation: what factors to take into account?

When you consider co-operation the abatement should reflect the extent to which the taxpayer has been prepared to co-operate throughout our enquiries and help to bring them to a speedy conclusion.

The time taken to reach a settlement is the starting point for considering abatement. You need to consider how far this has been influenced by the actions, or inaction, of the taxpayer or the agent. But you should also recognise that it will inevitably take longer to settle cases that are more than ordinarily complicated and the length of the enquiry period is often influenced as much by us as by the taxpayer. Age, health or absence may also have to be taken into account as well as delays resulting from genuine disagreements or ‘external’ intervention (IHTM36192).

It is not practical to lay down any fixed time limit to govern abatement. It should, however, be possible to arrive at a relationship between the time that could have been taken and that which has actually elapsed, and between the co-operation which might have been expected and that which has been given.

Against this background, you should bear in mind the presence in a case (or the absence from it) of the following features.

  • general delay
  • evasiveness in replies
  • unwillingness to take action to resolve issues or make progress
  • concealment of assets, piecemeal disclosures and untruthfulness
  • necessity to issue NODs or information notices to force progress
  • necessity to have NODs confirmed by the First-tier Tribunal
  • wrangling between taxpayers. At the end of the day you have to decide where the particular case falls on a scale ranging from full and complete co-operation to out-and-out obstruction, and fix the abatement accordingly.