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HMRC internal manual

Technical Teams Operational Guidance

Investigation work: Code of practice 9: examining the disclosure report: extent of examination of Disclosure Report

The extent to which the Disclosure Report is examined depends upon a number of factors:

  • the known level of experience of the adviser
  • whether or not the report can be seen at the outset to be potentially incomplete (see TTOG4525)
  • the inherent complexity of the case and any fraud disclosed
  • possible implication and identification of other taxpayers
  • factors affecting the urgency of examination (for example impending insolvency, severe ill health of the taxpayer etc).

In some cases it may not be necessary to carry out a detailed check but in others a thorough examination of both the working papers of the investigating adviser and the business and private records of the taxpayer will be needed. Generally the examination will require that every likely irregularity has been carefully considered. The total amount of omitted profits should be tested by reference to all known facts. However it is seldom necessary to pursue every doubtful expense, particularly if exact evaluation is unavailable. Time spent on issues only having a marginal effect on the settlement - where the case is clearly working in that direction - could be more profitably spent on other more worthwhile cases and issues.