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HMRC internal manual

Self Assessment Manual

HM Revenue & Customs
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Compliance: enquiry work: S12AC enquiries completed (partnership SA record) (Action Guide)

When you have completed your enquiries into a partnership return follow the instructions in the Enquiry Manual and steps 1 - 16 below. This Action Guide supplements the Enquiry Manual by telling you what SA and CQI Workbench functions to use after completing your enquiries.

For details of how to access any of the SA functions, select ‘Index of Functions’ on the left of the screen.

Additionally, where the enquiry record was set up using CQI Workbench function CREATE ITSA DISCOVERY, refer to the Action Guide ‘Concluding an enquiry: Using ITSA Discovery records’ (SAM31046).

The guide is presented as follows

  Steps 1 - 5
  Step 6
  Steps 7 - 13
  Step 14
  Steps 15 - 16

Action on the date of issue of the closure notice

1. Prepare the closure notice, including in it your conclusions and details of any amendments necessary
    ### No amendment arises from the enquiry
  2. If the closure notice shows no amendment is needed to the partnership statement
    * Go to step 7 in this Action Guide
    ### Amendment arises from the enquiry
  3. If the closure notice gives the Revenue’s view that different amounts (increase or decrease) should be included in the partnership return and partnership statement, make a Revenue amendment to the partnership return and partnership statement
  4. Use CQI Workbench function ENQUIRY DETAILS to enter the date of issue of the closure notice in the Closure Date field
  5. Issue the closure notice and the amended partnership statement to the nominated partner

Action if an appeal is received

| 6. | If the nominated partner appeals against the Revenue amendment | || |   | * Use function CREATE APPEAL to record the open appeal
And, if you cannot settle the appeal by agreement with the nominated partner | |   | * Submit the appeal for hearing by Tribunal |

Action when partnership statement becomes final

| 7. | Use the following CQI Workbench functions, where appropriate, to record details of the enquiry | || |   | * RISKS AND ADJUSTMENTS. Adjustment(s) must be recorded, except for Class A settlements. Details of Adjustments achieved are passed to InfoNet to provide management information. It is also used to determine the success of projects and future intervention strategies | |   | * QMS. The QMS Questionnaires must be completed if the In Progress QMS field has been checked in function ENQUIRY DETAILS | |   | * SETTLEMENT DETAILS. The details needed in this function will depend on the settlement class
Note: The settlement class recorded on the CQI Workbench determines the information you need to enter in function SETTLEMENT DETAILS.
The settlement classes are | |   | * A - No change to the return figure as a result of the enquiry | |   | * B - Change to the return figures for one or more years as a result of the enquiry, but no additional yield. No penalty | |   | * C - Change to the return figures for one or more years as a result of the enquiry, resulting in additional yield. No penalty | |   | * 1 - Class 1A settlement (as defined in EM0100) | |   | * 2 - Class 2 settlement (as defined in EM0100) | |   | * 3 - Transferred to Special Compliance Office (SCO) | | 8. | When the partnership statement becomes final (and the penalty abatement in respect of culpable additions to the partnership statement has been agreed with the nominated partner or determined following formal penalty action) | |   | * Use CQI Workbench function ENQUIRY DETAILS to enter the settlement date and, as necessary, update other fields | |   | When the settlement date has been entered on the record, the case is removed from the Open Enquiries List and is placed on the Settled Enquiries List. | |   | Note: The Settled Enquiries List only displays cases which have been settled in the current reporting year. | | 9. | Use SA function VIEW COMPLIANCE SUMMARY on each partner’s SA record | |   | * To check for an open S9A enquiry
And, if there is an open S9A enquiry, obtain | |   | * The name of the Case Owner by using SA function VIEW COMPLIANCE HISTORY (checking function AMEND TAXPAYER SIGNALS for any change in case ownership) | |   | * The Organisation Unit Identifier of the Enquiry Officer by using CQI Workbench function ENQUIRY DETAILS | | 10. | Notify each partner’s revised share of partnership Case I or II profits, other income and Capital Gains (and, in a S12AC enquiry for 1996-97 into Case I or II profits of a pre 6 April 1994 partnership, each partner’s share of notional tax and Class 4 NIC) plus any penalties chargeable on the partner to either | |   | * The S9A Enquiry Officer where there is an open S9A enquiry | |   | * The office with processing responsibility for the partner’s SA record where there is not an open S9A enquiry. If necessary use function VIEW TAXPAYER DESIGNATORY DETAILS to ascertain the office with processing responsibility for the partner | |   | Note: Except for a S12AC enquiry for 1996-97 into Case I or II profits of a pre 6 April 1994 partnership, identify culpable / non-culpable additions and penalty percentage applying to culpable additions in the notification | |   | The partner’s revised share of Case I or II profits for 1996-97 from a S12AC enquiry on a pre 6 April 1994 partnership must still be given in the notification (without identifying culpable / non-culpable additions). The details are used to amend the partners’ self assessments for 1996-97 and thereby prompt the computer to update payments on account for 1997-98 (or, alternatively, to calculate additional interest attributable to the increase in the payments on account for inclusion in a S9A contract settlement on the partner) | |   | * Request in your notification to the partner’s office that they acknowledge receipt of the same, except where the notification advises no change to the partnership statement (so the partner’s share is unaffected) | |   | * Keep the partnership record on B/F for confirmation from all the partners’ offices that your notifications have been received (you should set a BF date in the DIARY function on the CQI Workbench). A B/F is not required if the notifications advise no change to the partnership statement | | 11. | Use function MAINTAIN COMPLIANCE SIGNALS to check and, as necessary, add, amend or delete | |   | * Compliance notes | |   | * Third party information | |   | * Construction Industry signal | |   | Note: It is important to keep compliance details up to date as they are used in automatic and manual risk assessment. For more information see the subject ‘Compliance Signals’ (SAM32020) | | 12. | Use function ADD / AMEND ANNUAL COMPLIANCE DETAILS to enter or update the following for the post enquiry year | |   | * Mandatory Review for Possible Enquiry signal | |   | * Potential Selection for Enquiry Priority signal | |   | * Review Notes | |   | Note: It is important to set the above signals to ensure that a partnership return for a particular year is reviewed for possible enquiry. For more information about these signals see subject ‘Compliance Signals’ | |   | The settlement date is passed overnight from the CQI Workbench to the SA record. The following day, you should check in function VIEW COMPLIANCE HISTORY that this has been done, then continue with step 13 below. | | 13. | Use function MAINTAIN RESPONSIBLE OFFICE to set the Automatic Move (SAM31070) status to ‘N’ if some reason exists for inhibiting automatic transfer of your responsibility for the partnership during a bulk transfer of SA records | |   | Note: The entry in this field is changed from ‘N’ to ‘Y’ when the settlement date is passed from the CQI Workbench to the SA record unless there is another open enquiry on the partnership |

Revised Case I or II profits for 1996-97 of a pre 6 April 1994 partnership

| 14. | If your S12AC enquiry is for 1996-97 into Case I or II profits of a pre 6 April 1994 partnership the additional liability should be collected by either | || |   | * Negotiating a contract settlement with the nominated partner
Or | |   | * Amending the 1996-97 CODA partnership assessment |

Summarising the enquiry and noting the SA record- All Cases

15. If the enquiry involved a challenge to the original status claimed, even if the challenge was not the main part of the enquiry and if that outcome is unchanged from that returned by the taxpayer, use Function VIEW TAXPAYER DESIGNATORY DETAILS and the [Residency] button to enter ‘Y’ in the Residence box to indicate UK resident or ‘N’ to indicate non UK resident. The ‘Date Domicile Set’ field should record when the UK Domicile decision was made
16. Use function MAINTAIN SA NOTES to record where the enquiry papers are filed