GIM4170 - Taxation of general insurance: funded accounting: CTSA enquiry windows

The accounts will be submitted by 31 December 2003. This is part way through the enquiry window. Unlike CTPF, CTSA does not specify the format of the amended return, and the amendment may come in the form of a letter or revised computation, or simply the accounts themselves. As part of Risk Assessment procedures it would be prudent to ensure that where an enquiry has been opened into the original return it is not closed before the submission of the amended return. Alternatively, in normal circumstances the final date for enquiry is two years from the date of replacement of the technical provision, in this case by 30 April 2005. Note that ICTA88/SCH18/PARA85 (2) allows the Revenue to enquire into the whole return, not just the amendment.

FA98/SCH18/PARA27 would be the normal route by which the Inspector would obtain information about the replacement technical provision if these details were not submitted. The Inspector can make a “reasonable assumption” about the date on which the technical provision was replaced. In practice it would be necessary to open an enquiry in order to ascertain this information.

If no enquiry has been opened, and there has been a replacement of the technical provision but no amendment has been made to the company’s return before the expiry of the enquiry window, the Inspector should be able to make a discovery assessment. However, the use of fund accounting should be considered as part of the Risk Assessment of the original return. Where no immediate action is required, the return should be reviewed again before the expiry of the relevant enquiry time limits.

Where the original return is delivered later than two years after the date of the replacement of the technical provision, paragraph 85(3) allows the extended enquiry window in paragraph 24(3) to apply. This extended enquiry window stays open up to and including the quarter day next following the first anniversary of the date the return was delivered.

In general the determination provisions of paragraph 36 Schedule 18 are not likely to be relevant as a return would have been delivered for the relevant accounting period. All that is required is an amendment to finalise matters. In the situation where no return is made we have the same powers to make a determination as we have in any other case.