SCHEDULES

F1SCHEDULE 43AProcedural requirements: pooling notices and notices of binding

Corrective action by a notified taxpayer

4

(1)

If a person to whom a pooling notice or notice of binding has been given takes the relevant corrective action in relation to the tax arrangements and tax advantage specified in the notice before the beginning of the closed period mentioned in section 209(9), the person is to be treated for the purposes of paragraphs F26 to 9 and Schedule 43B (generic referral of tax arrangements) as not having been given the notice in question (and accordingly the tax arrangements in question are no longer in the pool).

(2)

For the purposes of this Schedule the “relevant corrective action” is taken if (and only if) the person takes the steps set out in sub-paragraphs (3) and (4).

(3)

The first step is that—

(a)

the person amends a return or claim to counteract the tax advantage specified in the pooling notice or notice of binding, or

(b)

F3... the person takes all necessary action to enter into an agreement with HMRC (in writing) for the purpose of relinquishing that advantage.

(4)

The second step is that the person notifies HMRC

(a)

that the first step has been taken, and

(b)

of any additional amount which has or will become due and payable in respect of tax by reason of the first step being taken.

(5)

Where a person takes the first step described in sub-paragraph (3)(b), HMRC may proceed as if the person had not taken the relevant corrective action if the person fails to enter into the written agreement.

(6)

In determining the additional amount which has or will become due and payable in respect of tax for the purposes of sub-paragraph (4)(b), it is to be assumed that, where the person takes the necessary action as mentioned in sub-paragraph (3)(b), the agreement is then entered into.

(7)

F4Where a tax enquiry is in progress, no enactment limiting the time during which amendments may be made to returns or claims operates to prevent the person taking the first step mentioned in sub-paragraph (3)(a) before the tax enquiry is closed.

(8)

No appeal may be brought, by virtue of a provision mentioned in sub-paragraph (9), against an amendment made by a closure notice in respect of a tax enquiry to the extent that the amendment takes into account an amendment made by the taxpayer to a return or claim in taking the first step mentioned in sub-paragraph (3)(a).

(9)

The provisions are—

(a)

paragraph 35(1)(b) of Schedule 33,

(b)

section 31(1)(b) or (c) of TMA 1970,

(c)

paragraph 9 of Schedule 1A to TMA 1970,

(d)

paragraph 34(3) of Schedule 18 to FA 1998, and

(e)

paragraph 35(1)(b) of Schedule 10 to FA 2003.