Case Selection, Handling and Settlement: Pro-active caseworking
Once a valuation has passed through the Risk Assessment process and requires further investigation, valuers should take a pro-active approach to working the case, with a view to progressing the case as quickly and cost-effectively as possible. This will involve:
- Making early contact by telephone with the taxpayer/agent
- Maintaining telephone contact to discuss areas of disagreement or issues that require clarification
- With the taxpayer/agent’s agreement, corresponding by email where appropriate
- Using other approaches, for example telephone conferences or meetings, that will best enable the case to be progressed
- Keeping in touch with the case-owner, providing regular and informative updates, ensuring at every stage that the valuation remains worthy of pursuit
The aim should be to establish the facts as quickly as possible. You should use those facts to inform your valuation conclusions. Valuations should rest on facts rather than on suppositions. The best arguments in the world are likely to fail before a tax tribunal unless the facts to back them up are available. If we cannot quickly get the facts we need to present a strong argument, we need to consider whether our fact finding is well – aimed and likely to assist in any litigation that may become necessary. This is our first opportunity to consider the likelihood of success in accordance with HMRC’s Litigation and Settlement Strategy (LSS). This should continue throughout the duration of a valuation case. (See SVM120080 for further information on LSS).
Preparation for litigation should not be left until all chances of a negotiated settlement have been exhausted. It should start much earlier. Early consideration of the chances of success in any possible litigation can bring important efficiency savings. In practice, this means getting the right facts quickly (if necessary using information powers). As it may not always be obvious what the right facts are, obtaining some initial litigation advice will help to direct the fact finding process.
Handling cases in a way that prepares for litigation assists in reaching agreed settlements. Focusing on key, strong arguments shows that we know our strengths and that we are developing a credible case in the event of litigation. We sometimes undermine good legal arguments by mixing them with poor ones – early advice and preparedness to litigate substantially mitigates this risk.
Every capital gains tax case in which an enquiry has been opened or which rests on a discovery assessment is a potential litigation case.
If you are asked to consider a capital gains tax valuation at the pre-enquiry stage and you recommend that an enquiry be opened, you must ask the Inspector to supply a copy of the opening enquiry letter as soon as that letter has been sent.
If any capital gains tax valuation arises in a case in which an enquiry has already been opened you must ask for a copy of the opening enquiry letter at the outset of your negotiations.
Similarly, if the Inspector has made a discovery assessment, you should ask for a copy of the assessment and a copy of any appeal at the outset of your negotiations.
You should NOT leave seeking the documentation mentioned above until negotiations fail or until a later stage in the handling of the case. You should ensure that copies of this documentation are obtained at the outset and are safely filed. This should ensure that we do not waste the time of taxpayers or, indeed, our own time when the appropriate legislative procedures that enable a case to be litigated have not been followed.
When case-owners and managers review cases they should ensure that this procedure has been followed.