SACM8020 - Making Enquiries into Claims: When to Open an Enquiry
Claims can be made in a return or outside a return. But it is best practice to open the enquiry as soon as we have identified a risk. If a claim made outside a return gives cause for concern we should open an enquiry into that claim under paragraph 5 Sch.1A.
We can always open an enquiry into the remaining entries on the return when it is subsequently filed if it is appropriate to do so. In many cases it may be necessary to open both enquiries if only to ensure that we can amend the self-assessment to give effect to our conclusions about the claim.
Opening enquiries into both the claim made outside the return and the subsequent return does provide safeguards in that you can:
- Question and finally establish the quantum of the claim
- Ascertain the validity of the claim and the claimant’s entitlement to the relief etc
- Give effect to any conclusions made as a result of the enquiry and
- Ensure that the correct amount of tax is paid or recovered as the case may be.
As stated at SACM6010 opening the enquiry as soon as the claim is made also allows you to withhold all or part of any repayment claimed. This can prevent problems with the recovery of any tax already repaid to the claimant and, in cases involving the use of avoidance schemes, removes any doubt about our view of things. To repay the sum claimed may suggest tacit agreement on our part.