INTM489979 - Diverted Profits Tax: imposing a charge – procedure and governance: time limits within the Diverted Profits Tax legislation
The DPT legislation provides time limits for the issue of preliminary notices; two years in a s86 case, or 6 months after the last day a company can amend its return in a s80, s81 case if a company notifies its potential liability and four years if not. HMRC and customers may wish to enter into initial discussions during this period and HMRC officers will gather relevant information from other sources to inform a decision on whether to issue a preliminary notice.
The DPT legislation provides a structured process which includes strict time limits. This is described in more detail in INTM489880, but the position can be summarised as follows:
| Action | Time Limit |
|---|---|
Preliminary notice issued by HMRC |
S80 or s81 case 6 months after the last day a company can amend their company tax return for the accounting period (in which the diverted profits arise) if the company notifies liability, otherwise four years. S86 case two years from the end of the accounting period (in which the diverted profits arise) if the company notifies liability, otherwise four years |
Representations from company |
30 days from issue of the preliminary notice |
Charging notice issued by HMRC |
30 days from the end of the period for representations |
Payment of tax |
30 days after the charging notice is issued |
Review period |
15 months beginning immediately after the latest day for payment of DPT (the review can be for a shorter period if there is agreement by both sides or if the company notifies that it is terminating the review following a supplementary charging notice – see INTM489986) |
Appeal by company |
30 days from end of the review period |
Once a preliminary notice has been issued the company has 30 days to submit written representations. The company can make any representations it wants but the designated HMRC officer only has to consider a restricted number of objective and easily verifiable matters (see INTM489880). Consequently, unless there has been a straightforward misunderstanding a preliminary notice will usually be followed by a charging notice and the 15-month review period.