SVM24030 - Share Valuation Manual: Self Assessment

Enquiries into Returns

The Revenue is entitled to enquire into the completeness and accuracy of any tax return. This right covers all enquiries, from straightforward requests for further information on individual items through to full reviews of books and records. All such enquiries require the issue of a formal notice.

Amending a Return

The Revenue also has power to 'repair' a self assessment to correct any obvious mistakes or errors (e.g. arithmetical errors) without opening a formal enquiry. The Revenue can make any repairs within a time limit of 9 months from the date the tax return was filed. Except where a return is under enquiry, a taxpayer can similarly make amendments to their self assessment at any time within a time limit of 12 months from the fixed filing date.

Selecting Cases For Enquiry

The Revenue selects cases for enquiry by means of a process of Risk Assessment (RA) together with the selection of a small random element.

All cases involving capital gains / losses are reviewed by an Inspector to identify cases where an enquiry is necessary. Inspectors have a booklet entitled "Capital Gains Tax Valuations - Where to get help / How to get help". This booklet includes:

• a list of the Revenue's specialist advisers (including those in SV);
    
• a list of contact points for Inspectors with any difficulty;
   
• instructions for completion of form CG30; and
   
• a quick reference to the detailed instructions in the CG Manual including a reminder about those references to SV which are mandatory.

In cases which involve valuation of unquoted shares and goodwill, Inspectors must seek advice from SV (in accordance with pre-SA instructions) to determine whether or not a formal enquiry is necessary. If the valuation included in the taxpayer's return can be accepted, it may not be necessary for the Inspector to open a formal enquiry.

Opening an Enquiry

If the Revenue wishes to make an enquiry it must give the taxpayer written notice within 12 months of the fixed filing date for the return (31 January) or, if the return is filed late, within the period ending on the first quarter day following the anniversary of the actual filing date. The quarter days are 31 January, 30 April, 31 July and 31 October. This time limit only applies to the opening of an enquiry, which will vary according to the nature and complexity of each case. However, a taxpayer may apply at any time to the General Commissioners for a notice that the enquiry is complete if it is considered that there are no grounds for continuing the enquiry.

SV Valuers are not directly responsible for the opening or control of any enquiry. It is the responsibility of the Inspector to ensure any enquiry is opened properly and is not closed until all necessary matters have been identified and settled. [See Chapter 31 regarding closure of SA enquiries and its implications for SV]

Once the time limit for making an enquiry has passed the Revenue is unable to amend the taxpayer's self assessment and the Revenue can only make a further 'discovery' assessment if the taxpayer has been fraudulent or negligent or has made an incomplete disclosure of information.

Information Power

When a formal notice of enquiry has been issued the Revenue has additional powers to obtain information. The Inspector may at any time whilst the enquiry is open issue a notice under s.19A Taxes Management Act 1970 requiring the production of documents, accounts or other written particulars within a specified time limit. Failure to comply with a document request notice can result in an initial penalty of £50 with additional daily penalties of up to £150 per day if the failure continues (see Chapter 30).