COM71020 - Enquiries: CTSA enquiries: taxpayer amendments

General

This information panel deals primarily with company amendments to CTSA returns received while an enquiry is in progress. (See the Enquiry Manual at EM1040 for more advice on this topic).

For general information on company amendments to CTSA returns in non-enquiry cases, see subject ‘Amendments to CTSA Returns’ (COM23010) in the ‘Assessing’ business area.

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Is it an Amendment?

HM Revenue & Customs does not prescribe the form of company amendments to returns and it is important to be clear about what the company is proposing to avoid any later dispute as to the status of what was received.

It is therefore prudent to confirm that what has been submitted is an amendment and not something less, such as interim computations discussed in ongoing enquiry negotiations.

HM Revenue & Customs can enquire into an amended return in just the same way as a main return. However, if the time-limit for enquiring into the original return has passed, the scope of any enquiry must be limited to matters relating to or affected by the amendment itself.

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Amendment received while HMRC enquiry in progress

If a company amends its return while an enquiry is in progress, the amendment does not restrict the scope of the enquiry, but may be taken into account, together with any matters arising in the enquiry. (Para 31(1) and (2) Sch 18 FA 1998.)

Any change to the tax charge, and any group relief or capital allowance consequences of the amendment, only become effective once the enquiry is closed.

Therefore, if you receive an amendment during the course of an enquiry you should

• Note it and keep the correspondence in a prominent place in the file
• Not amend the self assessment (Word 28KB) figures on the computer

If the company is within time to amend its return, you should take the company's amendment into account as part of your enquiry before you issue your Closure Notice, even if this means prolonging the enquiry in order to deal with any new points raised. (See the Enquiry Manual at EM1040.)

So far as the amendment affects

• The amount stated in the company's self assessment as the amount of tax payable

• Any amount that affects or may affect

• • The tax payable by the company for another AP

• • Or
    

• • The tax liability of another company for any AP it does not take effect until after the enquiry is completed. (Para 31(3))

Where the effect of an amendment has been deferred under Para 31(3), it takes effect as follows

• If the conclusions in the Closure Notice state either

• • That the amendment was not taken into account in the enquiry

• • Or
    

• • That no amendment of the return is required arising from the enquiry the amendment takes effect on the completion of the enquiry

• Otherwise, the amendment takes effect as part of the amendments made by the closure notice. (Para 31(4))

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Amendment anticipating conclusions in a Closure Notice

You may, as a result of negotiations leading up to the close of an enquiry, receive a revised computation from the company that fully and accurately anticipates your conclusions before you have stated them in a Closure Notice. The revised computation may be submitted within the applicable time limits so that it is a valid amendment.

You cannot conclude an enquiry into a company tax return by just accepting the revised computation, even if the figures subsequently stated in your Closure Notice would be identical to those in the revised computation. In order to complete the enquiry you must issue a Closure Notice under Para 32(1).

How you treat the revised computation depends on whether the Para 15 time limit for amending the company tax return has expired. (For information on time limits, see subject ‘Amendments to CTSA Returns’ (COM23010) in the ‘Assessing’ business area)

• If the Para 15 time limit to amend the return has not expired, the amendment is deferred under Para 31(3) and takes effect when the enquiry is completed
• If the Para 15 time limit has expired, the company cannot amend its return

For more information on closing enquiries in these circumstances, see subject ‘Closing An Enquiry: Non-Contract Settlements’ (COM71090).

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Amendment / claim received after HMRC enquiry concluded

The para 15 time limit for amending the company’s return will normally have expired by the time the enquiry is concluded. If the company cannot amend its return it may still be able to make or withdraw claims to group relief and capital allowances. In general, such claims may be made or withdrawn up to the first anniversary of the filing date (Word 42KB) for the return. However, where we enquire into a company tax return, the time limit is extended (under Paragraphs 74 and 82) until 30 days after the enquiry is completed. Those claims may be made or withdrawn at a later time, if HM Revenue & Customs allows it, under Paras 72(2) and 84(2).

If we make a Revenue Amendment (Word 30KB) following the completion of the enquiry the time limit is further extended to the later of 30 days after the Amendment notice was issued, or 30 days after the determination of an appeal against the Revenue Amendment.

For more information on the company’s right to make or withdraw claims to group relief and capital allowances at the end of an enquiry see subjects ‘Group Relief - Claims’ (COM53040), ‘Group Relief - Time Limit For Claims’ (COM53110) and ‘Capital Allowances - Claims’ (COM53010) in the ‘Claims/Reliefs’ business area.

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COTAX

COTAX only supports enquiries into original company tax returns; it does not support enquiries into amended returns. You must open, conduct and close those enquiries outside of COTAX.

• The wording of COTAX-issued Jeopardy Amendments, Closure Notices and Revenue Amendments, refers to a ‘company tax return’ and is not appropriate to an amended company tax return
• Where there is a settled enquiry into an original company tax return, Function MAPS (Maintain AP Signals) greys out the enquiry details fields which stops you setting the Enquiry in Progress signal to ‘Y’ on that AP again
• Where there has been no enquiry into the original return and the enquiry window has closed, you must not use MAPS to set the Enquiry in Progress signal to ‘Y’ on the AP if you wish to enquire into an amendment

When you conclude an enquiry into an amended company tax return, use Function RAMA (Record/Amend Assessment) to record the result on COTAX.

• Select the ‘Prepare a Revenue Amendment’ option to record your amendment

For more information see subject ‘Closing An Enquiry: Non-Contract Settlements’ (COM71090).

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Example Form

You can see an example of Taxpayer Amendment printed output in COM by following these steps

• Select Index Of Forms, from the menu on the left of the screen
• Use the scroll bar to find CT620, then [CT620(AckAmd)]
• Select the hyperlink. Acrobat Reader opens and displays the example form

For a list of forms relevant to this subject, see COM71021.

For a list of functions to use in particular situations, see COM71011.

For legislation applying to this subject, see COM71012.