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COM71141 - Enquiries: CTSA enquiries: closing an enquiry: enquiries under Schedule 1A TMA 1970 (Action Guide)

To close an enquiry under Schedule 1A into a claim or election not made in a return, consider steps 1 - 6 below. The guide is presented as follows

Enquiry completion procedures under Sch 1A TMA 1970 - post FA 2001	Step 1
Sch 1A enquiries, COTAX and Para 24 Sch 18 FA 98 enquiries	Steps 2 - 3
Closing the Sch 1A enquiry	Step 4
Processing the claim in COTAX	Steps 5 - 6

Enquiry completion procedures under Sch 1A TMA 1970 - post FA 2001

1.	If you are closing an enquiry that was opened
	On or before 11 May 2001
	Write to the company to tell them about the changes to the law before you close the enquiry
	After 11 May 2001
	Tell the company about the changes to the law when you start a new enquiry, or, if the enquiry is currently open, before you close it
	For further information about enquiries into claims and elections under Sch 1A, including the FA 2001 changes to the closure procedures, see EM8030, EM8560, EM6700 onwards, and EM3830 onwards

Sch 1A enquiries, COTAX and Para 24 Sch 18 FA 98 enquiries

2.	COTAX does not provide support for Sch 1A enquiries into claims and elections not made in a return. You must open, conduct and close those enquiries outside of COTAX
	Do not set the Enquiry In Progress signal to 'Y' in Function MAPS (Maintain AP Signals)
	If you have already set the signal because of your Sch 1A enquiry
	Unset the Enquiry In Progress signal from ‘Y’ to 'N'
	For more information about Sch 1A TMA 1970, see subject ‘Claims And Elections Not Made In A Return’ (COM52030) in the ‘Claims / Reliefs’ business area
3.	If the company has delivered a return for the AP affected by the Sch 1A claim and you are already conducting a Para 24 Sch 18 enquiry into the return
	You must handle the Sch 1A enquiry separately from the enquiry into the return
	You will be unable to record the Sch 1A claim on COTAX while the Enquiry In Progress signal is set for the Para 24 Sch 18 enquiry
	When you close your Para 24 Sch 18 enquiry, the Closure Notice should exclude the Sch 1A claim as it is not a deferred amendment to the return under Para 31(3) Sch 18
	You must record the Taxpayer or Revenue Amendment to finalise the Para 24 Sch 18 enquiry, before you can update COTAX with the result of the Sch 1A enquiry. (See 'Processing the claim in COTAX' below)

Closing the Sch 1A enquiry

4.	Issue the Closure Notice for the Sch 1A enquiry manually. Do not attempt to issue the Closure Notice with COTAX
	Note: Your manual Closure Notice, under Para 7(1) Sch 1A TMA
	Informs the claimant that the enquiry has come to an end
	Sets out your conclusions as to whether the claim should be refused or allowed in whole or part
	And
	Makes any amendment to the amount of the claim

Processing the claim in COTAX

5.	When you have issued the manual Sch 1A enquiry Closure Notice, you will need to update COTAX with the result. Subject to step 3 above
	Use Function RAMA (Record / Amend Assessment), ‘Process a Claim’ option, to amend the recorded claim (or record the amended claim) on COTAX and ensure that you suppress the assessing output.
	(You must do that because the wording of the computer-issued claims output is not appropriate to settling a Sch 1A enquiry).
	Note: Claims made outside the return are subject to the same ‘process now, check later’ treatment as claims made in a return. They must be given effect ‘as soon as practicable’ and will normally have been recorded using Function RAMA, ‘Process a Claim’ option, before you open your Sch 1A enquiry. However, Para 4 Sch 1A also envisages that the claim may be enquired into before you give effect to it.
	Depending on whether or not the claim has been recorded on COTAX when you open the Sch 1A enquiry, you will either be amending the recorded claim or newly recording the amended claim.
	For guidance on recording or amending the claim, see section ‘Claims And Elections Not Made In A Return’ (COM52030) in the ‘Claims / Reliefs’ business area
6.	When you have confirmed the changes, COTAX
	Records the company’s claim (or amended claim)
	Note: Whereas you process the claim with COTAX by making changes to the last issued assessment version for the AP, you give effect to the claim by discharge or repayment, not by amendment of the company’s return
	Will not issue a claim acknowledgement to the company because you have suppressed the assessing output. (The Para 7(1) Sch 1A Closure Notice informs the company of the amendment)
	Deals with any overpayment that results from the claim by reallocating the money to any outstanding liability on the COTAX record and repaying any balance, or - if COTAX is inhibited from handling the overpayment automatically - by putting it on Worklists LOPU (Overpayments Review List) or LOPD (Overpayments List)
	Deals with any underpayment which results from the claim by reallocating overpayments, if there are any, to satisfy the outstanding liability or by pursuing the underpayment automatically
	Takes you, where appropriate, to Function PPEN (Prepare Penalty Determination) to make or amend any tax-related (Word 30KB) penalty determination, if the claim affects the tax base for the penalty. (It makes an entry on the Penalties Requiring Review List (PENR) Work list when you process the claim, and removes it when you make or amend the penalty determinations)

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