SVM116110 - Case Selection, Handling and Settlement: Practice – The Selection of Cases – Risk Assessment

Risk Assessment (RA) is the process of making an informed judgement about the degree of risk of an immediate or future loss of tax arising directly or indirectly from concluding a valuation. It covers valuations for every fiscal purpose (save for share option cases).

RA is not itself an exercise in risk taking. It is about forming a view in a given case as to whether in the particular circumstances of that case HMRC would be at risk, and if so to what extent, if the value offered by the taxpayer were to be accepted.

RA is essentially a two stage process.

Stage One Risk Assessment

The first stage of RA involves the elimination of certain cases from further examination on first sight which will be carried out by a designated Risk Assessor. At the first touch the risk assessors will be able to identify a number of cases where it is obvious that the valuation cannot be closed on risk assessment e.g.

• Detailed valuation reports
• PTVCs
• Employment Income cases
• Deferred Income

In such cases the risk assessor will make a brief note on the RA1 stating why the file has been put into Division and divide the case to a specific valuer (in accordance with the Division Guidelines).

Stage Two Risk Assessment

If there is insufficient information on the file for the risk assessor to judge whether the value can be agreed he/she will access FAME and/or Companies House for additional information. If the case can be sifted out at this stage he/she will prepare a brief file note explaining why the value can be accepted and issue instructions on the RA1 accordingly.

If the information on FAME and Companies House is insufficiently detailed the risk assessor will advise the support staff (on RA1) to acknowledge receipt of the valuation request, create a UVC, send for the company tax file and then refer the tax file and CRN to the risk assessor on receipt.

Following review of the tax file the risk assessor will either instruct the support staff (on RA1) to agree the value or place the file into Division – placing a brief note on the RA1 explaining why the file has been put into Division.

Following receipt of a case valuers must bear in mind the key principles of case selection.