Procedure tables: voluntary disclosures and errors
An error may be adjusted for on the IPT return form provided:
- the adjustment relates to an error or errors in an accounting period ending no more than 4 years ago, subject to the transitional arrangements described in IPT7800;
- the amount of the underdeclaration or overdeclaration is limited to £10,000 or if greater, up to 1% of the net value of taxable premiums shown in box 10 of the IPT Return, the error not exceeding £50,000; and
- for overdeclarations, the insurer bore the cost of the error (i.e. the IPT was not borne by a customer or an intermediary); and
- the error is not deliberate.
Prior to 1 July 2008 the above limit for making an adjustment for an underdeclaration or overdeclaration was £2,000 or less.
Errors discovered in relation to accounting periods beginning on or after 1 April 2009 where the due date is on or after 1 April 2010 may be liable to a penalty if they are careless or deliberate. For further details see the Compliance Handbook (CH).
The net error = the total underdeclaration less the total overdeclaration - i.e. the overall under or overdeclaration.
- Where a voluntary disclosure has been made form IPT 641 should be used to notify CCU, by ticking the appropriate box on the form.
- If an insurer wishes to make a voluntary disclosure, they must do so before any enquiries into the insurer’s IPT records have commenced.
- Any voluntary disclosures resulting in a repayment due to the insurer must not be unduly delayed, as this may incur a repayment supplement.
- LIPTOs may amalgamate more than one assessment or voluntary disclosure for the same period (which can be useful for large insurers).
If payments have already been received for more than one voluntary disclosure with different receipt dates, these cannot be amalgamated).
When processing the notice of an error or voluntary disclosure where it would result in a repayment being made to the insurer, LIPTOs should first consider the unjust enrichment provisions before submitting an IPT 641 to CCU.