Finance Act 2014

220 Content of notice given while a tax enquiry is in progress U.K.

(1) This section applies where an accelerated payment notice is given by virtue of section 219(2)(a) (notice given while a tax enquiry is in progress).

(2) The notice must—

(a) specify the paragraph or paragraphs of section 219(4) by virtue of which the notice is given,

(b) specify the payment [F1 (if any)] required to be made under section 223 and the requirements of that section, F2 ...

(c) explain the effect of sections 222 and 226, and of the amendments made by sections 224 and 225 (so far as relating to the relevant tax in relation to which the accelerated payment notice is given)[F3 , and

(d) if the denied advantage consists of or includes an asserted surrenderable amount, specify that amount and any action which is required to be taken in respect of it under section 225A.]

(3) The payment required to be made under section 223 is an amount equal to the amount which a designated HMRC officer determines, to the best of that officer's information and belief, as the understated tax.

(4) “The understated tax” means the additional amount that would be due and payable in respect of tax if—

(a) in the case of a notice given by virtue of section 219(4)(a) (cases where a follower notice is given)—

(i) it were assumed that the explanation given in the follower notice in question under section 206(b) is correct, and

(ii) the necessary corrective action were taken under section 208 in respect of what the designated HMRC officer determines, to the best of that officer's information and belief, as the denied advantage;

(b) in the case of a notice given by virtue of section 219(4)(b) (cases where the DOTAS requirements are met), such adjustments were made as are required to counteract what the designated HMRC officer determines, to the best of that officer's information and belief, as the denied advantage;

(c) in the case of a notice given by virtue of section 219(4)(c)[F4 , (d) or (e)] (cases involving counteraction under the general anti-abuse rule), such of the adjustments set out in the GAAR counteraction notice as have effect to counteract the denied advantage were made.

[F5 (4A) Asserted surrenderable amount” means so much of a surrenderable loss as a designated HMRC officer determines, to the best of that officer's information and belief, to be an amount—

(a) which would not be a surrenderable loss of P if the position were as stated in paragraphs (a), (b) or (c) of subsection (4), and

(b) which is not the subject of a claim by P for relief from corporation tax reflected in the understated tax amount (and hence in the payment required to be made under section 223).

(4B) “Surrenderable loss” means a loss or other amount within section 99(1) of CTA 2010 (or part of such a loss or other amount).]

(5) “The denied advantage”—

(a) in the case of a notice given by virtue of section 219(4)(a), has the meaning given by section 208(3),

(b) in the case of a notice given by virtue of section 219(4)(b), means so much of the asserted advantage as is not a tax advantage which results from the chosen arrangements or otherwise, and

(c) in the case of a notice given by virtue of section 219(4)(c)[F6 , (d) or (e)] , means so much of the asserted advantage as would be counteracted by making the adjustments set out in the GAAR counteraction notice.

(6) If a notice is given by reason of two or all of the requirements in section 219(4) being met, [F7 any payment specified under subsection (2)(b) or amount specified under subsection (2)(d)] is to be determined as if the notice were given by virtue of such one of them as is stated in the notice as being used for this purpose.

(7) “The GAAR counteraction notice” means the notice [F8 under—

(a) paragraph 12 of Schedule 43 to FA 2013,

(b) paragraph 8 or 9 of Schedule 43A to that Act, or

(c) paragraph 8 of Schedule 43B to that Act,

as the case may be.]

Textual Amendments

F1 Words in s. 220(2)(b) inserted (26.3.2015) by Finance Act 2015 (c. 11), Sch. 18 para. 3(2)(a)

F2 Word in s. 220(2)(b) omitted (26.3.2015) by virtue of Finance Act 2015 (c. 11), Sch. 18 para. 3(2)(b)

F3 S. 220(2)(d) and preceding word inserted (26.3.2015) by Finance Act 2015 (c. 11), Sch. 18 para. 3(2)(b)

F4 Words in s. 220(4)(c) inserted (with effect in accordance with s. 157(30) of the amending Act) by Finance Act 2016 (c. 24), s. 157(21)(a)

F5 S. 220(4A)(4B) inserted (26.3.2015) by Finance Act 2015 (c. 11), Sch. 18 para. 3(3)

F6 Words in s. 220(5)(c) inserted (with effect in accordance with s. 157(30) of the amending Act) by Finance Act 2016 (c. 24), s. 157(21)(b)

F7 Words in s. 220(6) substituted (26.3.2015) by Finance Act 2015 (c. 11), Sch. 18 para. 3(4)

F8 Words in s. 220(7) substituted (with effect in accordance with s. 157(30) of the amending Act) by Finance Act 2016 (c. 24), s. 157(21)(c)