COM71093 - Enquiries: CTSA enquiries: closing an enquiry: manual closure notices (Action Guide)

To close an enquiry with a manual Closure Notice in a non-contract settlement case, consider steps 1 - 17 below. The guide is presented as follows

Enquiry into return for the wrong period Step 1
Enquiry requiring change of return version Step 2
Issuing a manual Closure Notice with Revenue Amendment Steps 3 - 8
Appeals against Jeopardy Amendments Step 9
Amendment anticipating conclusions in a Closure Notice Steps 10 - 13
Enquiry does not result in an amendment to the return Steps 14 - 16
Interaction with CQI or Caseflow Step 17

Enquiry into return for the wrong period

1. If you conclude that a company tax return under enquiry is for the wrong period you will need to amend the company's AP record to show the correct period or periods before you issue your manual Closure Notice with Revenue Amendment
 
  • See subject ‘Enquiry Into Return For The Wrong Period’ (COM71060)

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Enquiry requiring change of return version

2. If a Version 1 CT600 return form is delivered and your Closure Notice with Revenue Amendment needs to include entries that are only available on a Version 2 CT600 form
 
  • See subject ‘Enquiry Requiring Change of Return Version’ (COM71070)

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Issuing a manual Closure Notice with Revenue Amendment

3. If your enquiry results in an amendment to the return and the wording of the standard COTAX Closure Notice does not suit your case
 
  • Follow the detailed guidance at EM3871
 
  • Issue a manual Closure Notice with Revenue Amendment when you are ready to complete the enquiry, unless you are settling the enquiry by contract settlement
 

For information about contract settlements, see the Enquiry Manual at EM6000 onwards and subject ‘Closing An Enquiry: Contract Settlements’ (COM71120)
 

Note: If you receive an amendment anticipating your conclusions before you have stated them in a Closure Notice with Revenue Amendment, or your enquiry does not result in an amendment to the return, see the guidance below
4. Your manual Closure Notice must
 
  • Say that you have completed your enquiry
 
  • State your conclusions, taking into account any Taxpayer Amendment deferred under Para 31(3) Sch 18 FA 98
 

And
 
  • Amend the return to give effect to the conclusions stated in the notice
 

Note: If a Taxpayer Amendment was made during the enquiry and, exceptionally, you have not considered the amendment during your enquiry, you should say so in your Closure Notice
 

Follow the guidance in EM3871 and EM3878 if your case involves other circumstances - for example, where your conclusions affect other returns made by the company or returns made by other companies
5. Important: Do not attempt to record a manually issued Closure Notice with Revenue Amendment on COTAX
 
  • If you do, and forget to record that the Closure Notice has been issued manually, COTAX will issue its own spurious Closure Notice with Revenue Amendment
6. On the same day that you want to issue the manual Closure Notice with Revenue Amendment
 
  • Use Function MRSC (Maintain Rept / Realloc Signals (Company)) to inhibit reallocations or repayments to or from any AP of the company
 

Note: Using MRSC first inhibits any reallocations or repayments until you are ready to record the details of the Revenue Amendment which you have issued manually onto COTAX to amend the company’s liability
 
  • Use Function MAPS (Maintain AP Signals), to enter the enquiry Ended date equal to today’s date - the date that you will issue your manual Closure Notice with Revenue Amendment
 

Note: Entering the enquiry Ended date in MAPS
 
    • Automatically sets the enquiry In Progress signal to 'N'
 
    • Releases the repayment and reallocation inhibitions that were created by setting the enquiry In Progress signal to ’Y’ (but they are reapplied by using MRSC)
 
    • Gives access to the Function RAMA (Record / Amend Assessment) option which you will need to record the details of the manual Revenue Amendment onto COTAX
 
    • Removes access to the RAMA ‘Prepare a Closure Notice with Rev Amdt’ option which protects you from inadvertently creating and issuing a spurious COTAX Closure Notice with Revenue Amendment
 
  • Use RAMA option ‘Prepare a Revenue Amendment’ to enter the figures that reflect your conclusions and to calculate the amended liability
 

Important: store the Revenue Amendment as a draft. Do notissue it with COTAX
 
  • Print the draft Revenue Amendment and use the figures to help you prepare your manual Closure Notice with Revenue Amendment
 
  • Issue your manual Closure Notice with Revenue Amendment
 
  • Use RAMA option ‘Prepare a Revenue Amendment’ again - this time to record the manual issue of a Revenue Amendment in the figures contained in your earlier draft
 
    • Select ‘Record Manual Issue’ from the drop down menu for the ‘Do you want to?’ field on screen COT121G
 
    • Enter the date of issue as today’s date - the date of issue of your manual Closure Notice with Revenue Amendment
 
    • Where appropriate, deal with the penalty action dialog box at the end of RAMA which allows you to make, amend or inhibit any tax-related (Word 30KB) late-filing penalty determination based on the amended assessment
7 COTAX will
 
  • Create the relevant postings in Function VPPD (View Payments and Postings) to amend the company’s liability for the AP
 
8 When you have dealt with all the consequences of your enquiry, such as amending other returns as a result of your conclusions
 
  • Use Function MRSC (Maintain Rept / Realloc Signals (Company)) to unset the inhibitions on reallocations or repayments to or from any AP of the company

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Appeals against Jeopardy Amendments

9. If there is an open appeal against a Jeopardy Amendment you will need to dispose of it
 
  • See subject ‘Appeals Against Jeopardy Amendments’ (COM71050), which tells you how to dispose of appeals against Jeopardy Amendments

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Amendment anticipating conclusions in a Closure Notice

10. If you receive a revised computation that fully and accurately anticipates your conclusions before you have stated them in a Closure Notice
 
  • Confirm that what has been submitted is an amendment and not something less, such as interim computations discussed in ongoing enquiry negotiations
 

Note: HMRC 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
 

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 that computation. You must issue a Closure Notice under Para 32(1) to complete the enquiry
11. 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.)
12. 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
 
  • Issue a manual Closure Notice, by writing to the company, stating
 
    • That you have completed your enquiry and concluded that an amendment is needed to the company tax return
 
    • That the deferred Taxpayer Amendment has been taken into account in the enquiry
 
And
 
    • That it will satisfy the conclusions of the Closure Notice so no further amendment will be required
  On the same day
 
  • Use Function MAPS (Maintain AP Signals) to enter the enquiry Ended date equal to the date of issue of your manual Closure Notice. Doing that
 
    • Automatically sets the enquiry In Progress signal to 'N'
 
    • Releases the repayment and reallocation inhibitions that were created by setting the enquiry In Progress signal to ’Y’ (see the Note below about MRSC)
 
    • Gives access to the RAMA option you need to record the Taxpayer Amendment
 
    • Removes access to the RAMA ‘Prepare a Closure Notice with Rev Amdt’ option which protects you from inadvertently creating and issuing a spurious COTAX Closure Notice
 
  • Use the Function RAMA ‘Record a Taxpayer Amendment’ option to notify COTAX of the deferred Taxpayer Amendment
 

(For more information see subjects ‘Taxpayer Amendments’ (COM71020) and ‘Amendments to CTSA Returns’ (COM23010) in the ‘Assessing’ business area)
 

You can enter a message in the free format message field in RAMA when you record the deferred Taxpayer Amendment. It should say that the deferred Taxpayer Amendment has been taken into account in the enquiry and satisfies the conclusions of the Closure Notice so no further amendment is required. COTAX will issue an acknowledgement of that amendment to the company
 

Note: If you cannot use RAMA on the same day as using MAPS, use Function MRSC (Maintain Rept / Realloc Signals (Company)) to inhibit any reallocations or repayments until you are ready to record the Taxpayer Amendment. Unset the inhibitions with MRSC after you have recorded the Taxpayer Amendment
13. If the Para 15 time limit has expired, the company cannot amend its return
 
  • You should explain to the company that you cannot accept the revised computation as an amendment because the Para 15 time limit has expired
 
  • When you are ready, use the ‘Prepare a Closure Notice with Rev Amdt’ in RAMA to conclude the enquiry and amend the company’s return (see the ‘Closing An Enquiry: Non-Contract Settlement Cases’ (COM71092) Action Guide)

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Enquiry does not result in an amendment to the return

14. If the enquiry does not result in an amendment to the return
 
  • Issue a manual Closure Notice, by writing to the company, stating
 
    • That you have completed your enquiry
 
And
 
    • That you have concluded that no amendment is needed to the company tax return
 
The wording on the SEES CTSA Closure Notice ‘I do not need to make any amendments to the company’s self assessment return form’ meets this requirement
 
Note: If a Taxpayer Amendment was made during the enquiry and, exceptionally, you have not considered the amendment during your enquiry, you should state this in your Closure Notice
15. Use Function MAPS (Maintain AP Signals) to enter the enquiry Ended date equal to the date of issue of your manual Closure Notice. Doing that
 
  • Automatically sets the enquiry In Progress signal to 'N'
 
  • Gives access to the RAMA option you need to record any Taxpayer Amendment
 
  • Releases the repayment and reallocation inhibitions that were created by setting the enquiry In Progress signal to ’Y’ (see the Note below about MRSC)
 
  • Removes access to the RAMA ‘Prepare a Closure Notice with Rev Amdt’ option which protects you from inadvertently creating and issuing a spurious COTAX Closure Notice
16. If the enquiry does not result in an amendment to the return, but the company made a Taxpayer Amendment during the enquiry that was deferred under Para 31(3)
 
  • Use the Function RAMA ‘Record a Taxpayer Amendment’ option, to notify COTAX of the deferred Taxpayer Amendment
 

For more information see subjects ‘Taxpayer Amendments’ (COM71020) and ‘Amendments to CTSA Returns’ in the ‘Assessing’ business area
 

Note: If you cannot use RAMA on the same day as using MAPS, use Function MRSC (Maintain Rept / Realloc Signals (Company)) to inhibit any reallocations or repayments until you are ready to record the Taxpayer Amendment. Unset the inhibitions with MRSC after you have recorded the Taxpayer Amendment

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Interaction with CQI or Caseflow

17. If your office uses CQI or Caseflow
 
  • Update it with the settlement details once the enquiry is settled in COTAX

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