Consequential Claims after Assessment and Amendment: Culpable Additions
Where we make a discovery assessment or amend a return in an SA enquiry closure notice because of fraudulent or negligent conduct, the taxpayer can make an out-of-time claim for a relief or allowance for the relevant year.
The claim is limited to the extent that it can be given effect to
- in the discovery assessment, or
- against the additional liability charged by our amendment. (TMA70/S36(3) and 43C(1))
In such cases we accept that making a claim also includes increasing the amount of a previous claim.
Not all claims fall within the wording of section 36(3). For example it does not apply to
- a claim that an asset has become of negligible value (TCGA92/S24 (2))
- a claim that a loan to a trader has become irrecoverable (TCGA92/S253)
Section 36(3) does not permit a taxpayer to make an election out-of-time.
A report should be made to the appropriate Head Office section where, in the case of a late election, the Board is empowered to allow further time or a submission is mandatory. For example, certain late capital gains tax elections must be submitted under the guidance at CG13810.