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HMRC internal manual

Shares and Assets Valuation Manual

HM Revenue & Customs
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Self Assessment: Effect of SA on SAV Casework

The SA ‘enquiry’ procedure makes it very important that we maintain close liaison with Inspectors. It is also vital that valuers fully understand the enquiry process outlined above. Valuers need to be aware of the time limits set by the enquiry timetable and, although conduct of an enquiry is the prime responsibility of the Inspector, to ensure that full information about the progress (or lack of progress) of a valuation and its outcome is provided in good time.

The instructing officer’s instruction reflects the requirements of SA. This indicates whether or not:

  • the case comes under the SA regime;
  • the case is a pre-filing request;
  • a formal enquiry has already been opened

If the case comes under the SA regime (and is not the subject of a pre-filing request), no contact can be made with the taxpayer or his/her agent by SAV until a formal enquiry has been opened by the Inspector.

If a formal enquiry has already been raised by the Inspector (e.g. on other aspects of the return) you may decide what, if any, questions need to be put to the taxpayer/agent and proceed in the normal way. However such a case still needs to be subjected to Risk Assessment (see Chapter 120 of this manual SVM120000).

If the case comes under the SA regime but is not a pre-filing request (and where the Inspector has not already raised a formal enquiry), SAV needs to consider whether the valuation offered may be accepted before advising the Inspector to open a formal enquiry.

SAV should not encourage the unnecessary opening of formal enquiries. Before we suggest the opening of a formal enquiry we need to consider whether the valuation offered might be accepted on the basis of the information available from internal sources and, of course, whatever information is provided by the taxpayer in the tax return. The case should also be subjected to Risk Assessment before a formal enquiry is requested. Once it is clear that the value cannot be accepted on the basis of the available information and a worthwhile amount of tax is at stake, you should (except in PTVC cases where the tax return has not yet been received) recommend that the Inspector opens an enquiry.

In PTVC cases, you can, of course, correspond with the taxpayer/agent straightaway but you should always bear in mind the closure date for the enquiry window (Enquiry Manual EM1506), which you should prominently note in the case records. If an enquiry has not already been opened in a PTVC case, you should aim to notify the Inspector of the need to open one at the very latest three months before the enquiry window closes. Even where there is a request for a PTVC, therefore, you must still ask for an enquiry to be opened unless negotiations can be satisfactorily concluded before the window period closes. This should be done at the earliest possible opportunity in order that SA information powers (Enquiry Manual EM2200 and Chapter 118 of this manual SVM118000) can be brought into play as necessary.

  Additional Guidance: SVM150000