COM132060 - Returns / notices: return handling: mismatched return

This subject is presented as follows

General

A mismatched return is a return that the clerical section has been unable to log and capture using the AP details shown on the latest return submitted, as COTAX cannot automatically process the return information.

In such cases the Folder MS104 is noted as a mismatched return, and referred to a Technical Caseworker for attention. The returns are also entered on the AAPR (Amend Accounting Period List) Work List.

You deal with mismatched returns either on receipt from the clerical section, or as a result of a review of the AAPR Work List.

Detailed instructions on dealing with the specific circumstances giving rise to the Work List entries are given in the two Action Guides

• 'Mismatched Return CTPF AP'

And

• 'Mismatched Return CTSA AP'

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Penalties

When the Clerical Caseworker logs a return and COTAX identifies it as a mismatched return, the ‘Inhibit Penalty’ signal is set automatically for all APs for which a return is outstanding for that company.

This enters the case on AAPR (Amend Accounting Period Record) Work List and inhibits the issue of

• Return reminders
• Penalty determinations

For further information see section 'Penalty Determinations' in the ‘Penalties’ business area.

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Company outside the charge to CT

The likelihood is that there is a period during which the company was outside the charge to CT if the return was not accepted by COTAX because the AP start date on the return is before the

• Start of the earliest recorded live AP
• Date of incorporation
• Date of commencement

It is not then possible to log the return, as you cannot log a return against a dormant (Word 28KB) period.

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Return period relating to a CT Pay and File AP

Under the appropriate legislation it is for the company in the first instance to determine the period for which a return should be made. The position alters however when it comes to the assessment

• Under CT Pay and File, the Technical Caseworker makes the assessment

And, therefore

• Determines the period for which it should be made

Where the Clerical Caseworker cannot log a CT Pay and File return on receipt, a Technical Caseworker must deal with the particular situations arising, in accordance with the Action Guide 'Mismatched Return CTPF AP' (COM132062).

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Return period relating to a CTSA AP

Under the appropriate legislation it is for the company to determine the period for which a return should be made. The legislation specifically provides that if a period is treated as an AP in a company’s return it must be treated as an AP for the purposes of a self assessment provided the period shown on the return does not exceed twelve months.

It follows that you must accept the AP details provided on a CTSA return as being the period of the company’s self assessment.

You can only challenge the validity of the AP provided, by

• Correcting it, if the apparent error comes from a failure to apply the proper principles to be used in arriving at CT APs

Or

• Opening an enquiry into the return, if the apparent error comes from an incorrect view of the facts

Correction

As a general rule the Technical Caseworker should only give authority to correct a return in these circumstances if

• The company or agent acknowledges the existence of a fact that causes an AP to stop or start, but fails to recognise or give effect to the relevant legal principle

And

• You believe that the company or agent will be content to follow your approach, taking account of any implications it may have on the obligation to make a return for some other period(s)

For further information on the specific action to be taken, see the 'Mismatched Return CTSA AP' Action Guide (COM132063).

Enquiry

It is likely that the start or finish of a trade will be in question, and the company or agent are unwilling to accept the fact of commencement or cessation, or the date on which the event took place. You can only challenge such cases by opening an enquiry into the return.

If you decide that the position can only be dealt with by way of an enquiry

• Use Function MAPD (Maintain AP Dates) to amend the AP record in accordance with the return received
• Have the return logged and captured

And

• Proceed in accordance with the guidance given in the 'Enquiries' business area

For a list of forms relevant to this subject, see COM132011.

For a list of functions to use in particular situations, see COM132021.

For legislation applying to this subject, see COM132022.