AH2165 - Appeals Handbook - ITSA Appeals: Assessments, Amendments and Enquiries: When to refer a question to the Special Commissioners

It is expected that only more complex and important questions will be referred to the Special Commissioners and that most joint referrals will involve specialist offices working enquiry cases themselves or policy areas advising on cases.

It will not usually be necessary to refer a question to the Special Commissioners. Most questions can be adequately resolved at the end of your enquiry. This is true even if the issue you are unable to agree with the customer is a basic issue, such as whether a payment is capital or revenue. You can gather all the information you need during the enquiry and reach your own conclusion. Your closure amendment will reflect your conclusion and the taxpayer is able to appeal if they still disagree.

If either you or the taxpayer identify an issue as suitable for referral you should consider all the implications of a referral, including:

• when you are likely to be in a position to close your enquiry or whether you can do so immediately
• whether you want to keep the enquiry open
• the delay in being able make an amendment and bring any additional tax into charge. The referral process could take years if there is an appeal against the Commissioners’ determination but interest runs from original due dates and you can ask for interim payments.
• other issues likely to arise which would be suitable to put into one referral
• is the issue important or complex enough to need determining by the Special Commissioners? The customer can elect for a hearing by the Specials in any appeal against your enquiry conclusions or amendment but has no choice other than the Specials for a referral.

If you expect to be able to complete your enquiry in the foreseeable future do not agree to a joint referral during the enquiry. You will be able to complete your enquiry by closure notice to the customer when you have:

• received the relevant information you need and
• agreed what conclusions you can with the taxpayer and
• put your other unagreed conclusions to the taxpayer and
• considered everything the taxpayer wants to put to you.

If the taxpayer has asked for a referral and you do not consider that a referral is appropriate, write to them explaining your reasons. Remind the taxpayer that they have the right to appeal at the end of your enquiry. Bear in mind that a refusal to join in on an application may result in the customer applying to the Commissioners for a direction requiring you to issue a closure notice within a specified period.

There is no right of appeal against your refusal to join in with a referral. Provided you consider the request seriously and give your reasons, we do not believe that we are acting unreasonably or denying the customer any rights if you decide not to join in a referral. The customer can still appeal at the end of the enquiry.

You cannot make a referral unless the taxpayer agrees to do so jointly with you. If you decide that your case is suitable for a referral to the Special Commissioners during the enquiry you should discuss the case with your manager and any technical/policy adviser who has been involved in your case.

If you are not in a specialist office and your manager agrees with your decision, you should refer the case to Central Policy: Tax Administration Policy before contacting the customer.

If you are working the case in a specialist office (such as LBO, SIS, OTO) please give details of the referral to Central Policy: Tax Administration Policy but you do not need to contact Central Policy: Tax Administration Policy before making a joint referral.