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HMRC internal manual

Partnership Manual

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HM Revenue & Customs
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Self Assessment for partnerships: compliance checks: information powers

You may need to use information powers if an informal approach for information or documents is unsuccessful. Full guidance is available at CH23000 onwards. There are some special rules in relation to partnerships (at FA08/Sch36/S37) which are summarised below.

The first set of special rules for partnerships concerns third party notices given for the purposes of checking the partnership tax position of one or more partners (see CH23670 onwards for full details). The following situations may apply:

  1. Notice given to a person other than a partner, or to a person who is a partner but was not a relevant partner during the chargeable period covered by the notice, for the purpose of checking the tax position of more than one partner.
    1. The notice only needs to include the name of the partnership, not the names of individual partners,
    2. Approval is needed from only one of the partners concerned to issue a taxpayer approved notice,
    3. You only need to send a copy of the notice to one of the partners, and
    4. You only need to send a summary of your reasons to one of the partners concerned if you apply for tribunal approval to issue the notice.
       

Please note that, where the purpose is to check the tax position of only one partner, the normal rules on third party notices apply. Approval from the named partner or the tribunal will be required.

The recipient of the notice has the normal third party appeal rights, whether the tax position of one or more partners is being checked; the only grounds of appeal are that it would be unduly onerous to comply with the notice (see CH23620).

  1. Notice given to a relevant partner whose own tax position and that of one or more other partners is affected.
    1. You will issue a combined taxpayer and third party notice,
    2. If the tax position of only one other partner is being checked, the combined notice must name the other partner but you do not need approval from the named partner or the tribunal, nor do you need to give a copy of the notice to that partner,
    3. If the tax position of more than one other partner is being checked, the combined notice only needs to include the name of the partnership and no approval is needed from the other partners or the tribunal, nor do you need to give a copy of the notice to any other partner.
       

The recipient of the notice has the normal taxpayer appeal rights (see CH24320), which are less limited than those for third party recipients.

  1. Notice given to a relevant partner whose own tax position is unaffected.
    1. If the tax position of only one other partner is being checked, the notice must name the other partner but you do not need their approval, nor that of the tribunal,
    2. If the tax position of more than one partner is being checked, you only need to name the partnership and no approval from any of the partners or the tribunal is needed, nor do you need to give a copy of the notice to any other partner.
       

In this situation, the recipient of the notice has the normal taxpayer appeal rights.

The second special rule for partnerships relates to identity unknown notices given for the purposes of checking the tax position of a person whose identity in not known, or a class of persons whose individual identities are not known.

Usually, tribunal approval of an identity unknown notice is essential. However, as per the guidance at CH23960, an authorised officer may issue such a notice to a partner, in respect of one or more other partners whose identities are not known, without tribunal approval.