EM1905 - Working an Enquiry: Moving from Aspect to Full Enquiry
If a decision is made to work the case as a full enquiry it
should be reclassified as full.
It is not possible to lay down hard and fast rules for every
possible situation in which aspect enquiries may need to be
reclassified. You should generally consider whether to develop your
enquiries into a full examination of the return when something has
come to light which suggests that more is involved than, for
example, a straightforward mistake, a misunderstanding of the legal
position or a genuine dispute as to the tax consequences of a
transaction, and this raises questions about the reliability of the
rest of the return.
For instance, your exploration of the facts underlying a
computation may lead you to conclude that the taxpayer deliberately
mis-stated the position or even tried to cover up those facts which
conflicted with the gloss which he or she put on the transaction.
You will need to assess the degree of mis-statement involved and
decide, on the basis of this, whether the whole return is likely to
be fundamentally flawed. If you conclude that the accuracy of the
whole return is open to doubt you should extend the scope of your
enquiry.
When moving from an aspect to a full enquiry the case will
need to be reclassified for recording purposes. As your opening
letter in the aspect enquiry would have indicated that certain
issues only were to be looked at, you should tell the taxpayer that
you are now widening your enquiries. If the taxpayer was given the
short Code of Practice at the opening of your enquiry, you should
now give them the full Code of Practice.
Reasons for extending enquiries
The initial Section 9A notice covers all enquiries into that
return, whatever their nature or scope. But taxpayers and their
agents, when faced with the development of what was originally an
aspect enquiry into an in-depth examination of the whole return,
may question the reasons behind your decision. The Code of Practice
says we will attempt to avoid piecemeal enquiries. You will
normally already have explained to the taxpayer and agent what
information has caused you to consider that more is involved than
simple error or a difference of opinion and led to your decision to
extend the scope of your enquiry. Apart from explaining why you did
not take up matters earlier, when in theory you might have done,
you do not need to justify your wider enquiries.
You should continue your enquiry by requesting all the
information that you now consider to be necessary to check the
return. The taxpayer will have the right of appeal against any
Section 19A notice you issue to obtain this information and will,
in any proceedings before the Commissioners, be able to advance the
argument that the information you have specified is not reasonably
required for the purpose of checking the return because you have
already obtained all the relevant information. Alternatively, they
will be able to ask the Commissioners to direct that the enquiry
should be brought to a conclusion
EM1975+.
