Where a Self Assessment Return has been submitted prior to a
Court decision which amends an earlier view of the law, if the
taxpayer fails to amend the return within the subsequent amendment
window the failure could constitute negligence within the meaning
in S97 and thus negligence under S29(4) giving rise to a discovery
assessment scenario. - seek advice from Tax administration Advice,
Stockport.
Where a taxpayer has not already made Returns at the date of
the decision, s/he should complete Returns in accordance with the
revised view of the law whether for the year in which the decision
is handed down or for any other year.
Within the enquiry window, HMRC is entitled to open an enquiry
into a Return to give effect to a revised view of the law even
where the Return was submitted prior to the date of a decision
which amends an earlier held view of the law and the Return was
made on the basis of that earlier view. This is the case even where
the change will not be to the taxpayer’s advantage.
If there is an open enquiry into a Return which was submitted
prior to the date of the decision and which was opened for some
other reason, then the effect of the decision should be taken into
account when closing the enquiry, again even where this is not to
the taxpayer’s advantage.
Where an enquiry has not yet been opened, the implications of
the decision are just one factor to be taken into account in the
risk assessment when deciding whether or not to open one.
Exceptionally, as a consequence of the effect of a Court
decision, you may become aware that there is an obvious error or
omission in a Return you are dealing with. You may then consider
correcting the Return within the nine-month window for Revenue
corrections.
