Making Enquiries Into Claims: Claim Made on a Return for a Different Year
Occasionally, claimants may make a claim for one year on the return for a different year.
- A trading loss relating to an accounting period ending in 2005-06 may be claimed in the additional information box of the 2004-05 return.
- Alternatively, the return for 2005-06 could include a claim to loss relief in respect of an accounting period ending in 2004-05.
So, before you can decide which right of enquiry is relevant (section 9A or para.5 Schedule 1A) you have to determine whether the claim amends a return or whether it is to be treated as a stand-alone claim.
Using example 2 above, let’s assume that the following facts are relevant to the case:
- The return for 2004-05 was issued on 6 April 2005.
- The statutory filing date for that return was 31 January 2006 and the time allowed for an amendment under section 9ZA ran out on 31 January 2007.
- The return was filed on 30 November 2005 and loss relief was not claimed.
- The return for 2005-06 was issued on 6 April 2006.
- The statutory filing date for that return was 31 January 2007 and the time allowed for an amendment under section 9ZA ran out on 31 January 2008.
- The return was filed on 30 November 2006 and included a claim to loss relief relating to 2004-05. Information was given about the claim in the additional information box.
At 30 November 2006, when the 2005-06 return is filed, it is still possible for the taxpayer to amend his return under section 9ZA. As that is so, the claim is treated as an amendment to the return for 2004-05 and an enquiry may be opened under section 9A.
Had the 2005-06 return been filed at a time when the taxpayer could no longer amend his return under section 9ZA, the claim on the later return would be treated as a stand-alone claim and any enquiry would be opened under para.5 Schedule 1A.
The 2005-06 return may give cause for concern in other respects and if you wanted to make enquiries into the return, you would have two enquiries:
- One into the 2005-06 return under section 9A or and
- One under para.5 Schedule 1A into the claim for the earlier year.
Care needs to be taken in these situations to ensure that the opening letters leave the taxpayer in no doubt as to what his rights and obligations are. Also, the correct procedures need to be followed when closing the enquiry, see SACM8055.
When dealing with partnership returns, any enquiry would be under section 12AC or para.5 Schedule 1A.