Finance Act 2013

PART 3 U.K. Enquiry into return

Notice of enquiry U.K.

8 (1) An officer of Revenue and Customs may enquire into a return if sub-paragraph (2) has been complied with. U.K.

(2) Notice of the intention to make an enquiry must be given—

(a) to the person by whom or on whose behalf the return was delivered (“the relevant person”);

(b) before the end of the period of 12 months after the relevant date.

(3) The relevant date is—

(a) the filing date, if the return was delivered on or before that date;

(b) the date on which the return was delivered, if the return was delivered after the filing date;

(c) the date on which the amendment was made, if the return is amended under paragraph 3 (amendment by person making the return).

(4) A return that has been the subject of one notice under this paragraph may not be the subject of another, except a notice given in consequence of an amendment (or another amendment) of the return under paragraph 3.

(5) A notice under this paragraph is referred to as a “notice of enquiry”.

Scope of enquiry U.K.

9 (1) An enquiry extends to anything contained in the return, or required to be contained in the return, that relates— U.K.

(a) to the question whether the relevant person is chargeable to tax with respect to the interest to which the return relates for the chargeable period concerned, or

(b) to the amount of tax chargeable on the relevant person with respect to that interest for that period.

(2) Sub-paragraph (3) applies if the notice of enquiry is given as a result of the amendment of a return under paragraph 3 (amendment by person making the return)—

(a) at a time when it is no longer possible to give a notice of enquiry under paragraph 8(3)(a) or (b), or

(b) after an enquiry into the return has been completed.

(3) The enquiry is limited to—

(a) matters to which the amendment relates, and

(b) matters affected by the amendment.

Amendment of self assessment during enquiry to prevent loss of tax U.K.

10 (1) If at a time when an enquiry is in progress into a return an officer of Revenue and Customs forms the opinion— U.K.

(a) that the amount stated in the self assessment contained in the return as the amount of tax payable is insufficient, and

(b) that unless the assessment is immediately amended there is likely to be a loss of tax to the Crown,

the officer may by notice in writing to the relevant person amend the assessment to make good the deficiency.

(2) If the enquiry is one that is limited by paragraph 9(2) and (3) to matters arising from an amendment of the return, sub-paragraph (1) above applies only so far as the deficiency is attributable to the amendment.

(3) For the purposes of this paragraph the period during which an enquiry is in progress is the whole of the period—

(a) beginning with the day on which the notice of enquiry is given, and

(b) ending with the day on which the enquiry is completed.

Referral of questions to tribunal during enquiry U.K.

11 (1) At any time when an enquiry is in progress into a return any question arising in connection with the subject-matter of the return may be referred to the tribunal for determination. U.K.

(2) Notice of the referral must be given to the tribunal jointly by the relevant person and an officer of Revenue and Customs.

(3) More than one notice of referral may be given under this paragraph in relation to an enquiry.

(4) For the purposes of this paragraph the period during which an enquiry is in progress is the whole of the period—

(a) beginning with the day on which the notice of enquiry is given, and

(b) ending with the day on which the enquiry is completed.

Withdrawal of notice of referral U.K.

12 U.K. An officer of Revenue and Customs or the relevant person may withdraw a notice of referral under paragraph 11.

Effect of referral on enquiry U.K.

13 (1) While proceedings on a referral under paragraph 11 are in progress in relation to an enquiry— U.K.

(a) no closure notice may be given in relation to the enquiry, and

(b) no application may be made for a direction to give a closure notice.

(2) Proceedings on a referral are “in progress” where—

(a) notice of referral has been given and has not been withdrawn, and

(b) the questions referred have not been finally determined.

(3) A question referred has been “finally determined” when—

(a) it has been determined by the tribunal, and

(b) there is no further possibility of the determination being varied or set aside (disregarding any power to grant permission to appeal out of time).

Effect of determination U.K.

14 (1) A determination under paragraph 11 is binding on the parties to the referral in the same way, and to the same extent, as a decision on a preliminary issue in an appeal. U.K.

(2) The officer of Revenue and Customs conducting the enquiry must take the determination into account—

(a) in reaching conclusions on the enquiry, and

(b) in the formulation of any amendments of the return that may be required to give effect to those conclusions.

(3) The question determined may not be reopened on an appeal, except to the extent that it could be reopened if it had been determined as a preliminary issue in that appeal.

Tribunal to which referrals are made U.K.

15 (1) Where the question to be referred under paragraph 11 is of the market value of any single-dwelling interest, the referral is to be made to— U.K.

(a) the Upper Tribunal, if the land is in England and Wales;

(b) the Lands Tribunal for Scotland, if the land is in Scotland;

(c) the Lands Tribunal for Northern Ireland, if the land is in Northern Ireland.

(2) In any other case a referral under paragraph 11 is to be made to—

(a) the First-tier Tribunal, or

(b) where determined by or under Tribunal Procedure Rules, the Upper Tribunal.

(3) References to “the tribunal” in paragraphs 11 and 13 are to be read accordingly.

Completion of enquiry U.K.

16 (1) An enquiry under paragraph 8 is completed when an officer of Revenue and Customs informs the relevant person by a notice (a “closure notice”) that the enquiry is complete and states the conclusions reached in the enquiry. U.K.

(2) A closure notice must either—

(a) state that in the officer's opinion no amendment of the return is required, or

(b) make the amendments of the return required to give effect to the officer's conclusions.

(3) A closure notice takes effect when it is issued.

Direction to complete enquiry U.K.

17 (1) The relevant person may apply to the tribunal for a direction that a closure notice is to be given within a specified period. U.K.

(2) The tribunal hearing the application must give a direction unless satisfied that HMRC have reasonable grounds for not giving a closure notice within that period.

(3) In this paragraph “the tribunal” means—

(a) the First-tier Tribunal, or

(b) where determined by or under Tribunal Procedure Rules, the Upper Tribunal.