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16 October 2000
When members have received their forms CTA1, they are obliged to notify the Inland Revenue of the correct figures without unreasonable delay. If there is an unreasonable delay, section 97, Taxes Management Act 1970 deems there to have been negligence and penalties can be charged. In the current situation, some members and tax advisers have said that it may take them until the end of March to submit revised figures to the Inland Revenue. The Inland Revenue has confirmed that, in the circumstances, this will not be treated as unreasonable delay.
When members have received their forms CTA1, they are obliged to notify the Inland Revenue of the correct figures without unreasonable delay. If there is an unreasonable delay, section 97, Taxes Management Act 1970 deems there to have been negligence and penalties can be charged. In the current situation, some members and tax advisers have said that it may take them until the end of March to submit revised figures to the Inland Revenue. The Inland Revenue has confirmed that, in the circumstances, this will not be treated as unreasonable delay.
Members affected by the discounting dispute should have received an Inland Revenue enquiry notice for 1997-98 and may also have received an enquiry notice for 1998-99.
The sequence of events for enquiry closure is as follows:
(i) The taxpayer supplies the Revenue with finalised figures for inclusion in the revised return. These should ideally be expressed in terms of the relevant tax return box number and include a revised tax computation. A copy of the revised CTA1 should be included to allow the Revenue to check the figures without the need to correspond further.
(ii) The Revenue, once satisfied that the amended figures are acceptable, will issue a formal closure notice and invite the member to make a 'taxpayer amendment'. The closure notice will state the final tax liability for the year. The Revenue will supply the member with a form to sign and return to it within a specified time limit. The form constitutes the 'taxpayer amendment' and requires the member's own signature (an agent's signature will not be accepted). It is important that members anticipating a reduction in their liability on closure of the enquiry do not miss this deadline. The self-assessment return will be amended once the Inland Revenue has received an acceptable 'taxpayer amendment'.
(iii) In the absence of an acceptable 'taxpayer amendment' within the specified time limit, the Inland Revenue may issue its own notice.
Members affected by the discounting dispute should have received an Inland Revenue enquiry notice for 1997-98 and may also have received an enquiry notice for 1998-99.
The sequence of events for enquiry closure is as follows:
(i) The taxpayer supplies the Revenue with finalised figures for inclusion in the revised return. These should ideally be expressed in terms of the relevant tax return box number and include a revised tax computation. A copy of the revised CTA1 should be included to allow the Revenue to check the figures without the need to correspond further.
(ii) The Revenue, once satisfied that the amended figures are acceptable, will issue a formal closure notice and invite the member to make a 'taxpayer amendment'. The closure notice will state the final tax liability for the year. The Revenue will supply the member with a form to sign and return to it within a specified time limit. The form constitutes the 'taxpayer amendment' and requires the member's own signature (an agent's signature will not be accepted). It is important that members anticipating a reduction in their liability on closure of the enquiry do not miss this deadline. The self-assessment return will be amended once the Inland Revenue has received an acceptable 'taxpayer amendment'.
(iii) In the absence of an acceptable 'taxpayer amendment' within the specified time limit, the Inland Revenue may issue its own notice.
