CCM12710 - Opening and Working Enquiries: Taxpayer is a Tax Credits Claimant and there are No Identifiable Tax Credit Risks other than Income

The following guidance relates to cases where there were no identifiable Tax Credit risks other than income and the SA enquiry does not uncover any other TC risks. If the SA enquiry uncovers other TC risks see CCM12720.

SA enquiry establishes or quantifies omissions or but there will be no contract settlement

As soon as they establish or quantify omissions or adjustments the Enquiry officer must liaise with the Tax Credits Consultant (TCC) to measure the Tax Credits impact. This must happen before they issue a closure notice.

Tax Credits Consultant (TCC) action:

• Where necessary, issue a Tax Credits opening letter in conjunction with the Enquiry officer’s letter advising the taxpayer of the income omissions or adjustments. This opens the Tax Credits enquiry under S19 (1) TCA 2002.
• amend the award for the year (s) of enquiry, and if appropriate consider whether the current year’s award needs revision for income.
• if appropriate, negotiate a contract settlement on the Tax Credits alone, see CCM14040.

SA enquiry establishes or quantifies omissions or adjustments that will require a contract settlement

As soon as they establish or quantify omissions or adjustments the Enquiry officer must liaise with the Tax Credits Consultant (TCC) to measure the Tax Credits impact. This must happen before they invite a contract settlement.

TCC action:

• Where necessary issue an opening letter in conjunction with the Enquiry officer’s letter advising taxpayer of income etc omissions. This opens the Tax Credits enquiry under S19 (1) TCA 2002.
• If both SA and Tax Credits require closure by contract settlement, it is best to negotiate jointly and obtain separate letters of offer for SA and Tax Credits.
• Amend the award for the year(s) of enquiry
• Where necessary consider whether the current year’s award needs revision for income.