Office of Public Sector Information
SCHEDULE 29 continued PART 3 continued
7 (1) In Part 4 of Schedule 18 to the Finance Act 1998 (c. 36) (enquiry into company tax return), after paragraph 31 insert—
31A (1) At any time when an enquiry is in progress into a company’s tax return any question arising in connection with the subject-matter of the enquiry may be referred to the Special Commissioners for their determination.
(2) Notice of referral must be given—
(a) jointly by the company and the Inland Revenue,
(b) in writing,
(c) to the Special Commissioners.
(3) The notice of referral must specify the question or questions being referred.
(4) More than one notice of referral may be given under this paragraph in relation to an enquiry.
(5) For the purposes of this paragraph the period during which an enquiry is in progress is the whole of the period—
(a) beginning with the day on which the Inland Revenue give notice of enquiry into the return, and
(b) ending with the day on which the enquiry is completed.
31B (1) The Inland Revenue or the company may withdraw a notice of referral under paragraph 31A by notice in accordance with this paragraph.
(2) Notice of withdrawal must be given—
(a) in writing,
(b) to the other party to the referral and to the Special Commissioners,
(c) before the first hearing by the Special Commissioners in relation to the referral.
31C (1) While proceedings on a referral under paragraph 31A are in progress in relation to an enquiry—
(a) no closure notice shall be given in relation to the enquiry, and
(b) no application may be made for a direction to give such a notice.
(2) For the purposes of this paragraph proceedings on a referral are in progress where—
(a) notice of referral has been given,
(b) the notice has not been withdrawn, and
(c) the questions referred have not been finally determined.
(3) For the purposes of sub-paragraph (2)(c) a question referred is finally determined when—
(a) it has been determined by the Special Commissioners, and
(b) there is no further possibility of that determination being varied or set aside (disregarding any power to grant permission to appeal out of time).
31D (1) The determination of a question referred to the Special Commissioners under paragraph 31A is binding on the parties to the referral in the same way, and to the same extent, as a decision on a preliminary issue in an appeal.
(2) The determination shall be taken into account by the Inland Revenue in reaching their conclusions on the enquiry.
(3) Any right of appeal under paragraph 30 or 34(3) may not be exercised so as to reopen the question determined except to the extent (if any) that it could be reopened if it had been determined as a preliminary issue in that appeal.”.
(2) This paragraph applies in relation to an enquiry under Part 4 of Schedule 18 to the Finance Act 1998 (c. 36)—
(a) in relation to which notice of enquiry is given after the passing of this Act, or
(b) which is in progress (within the meaning of paragraph 31(5) of that Schedule) immediately before the passing of this Act.
8 (1) For section 28A of the Taxes Management Act 1970 (c. 9) (amendment of self-assessment where enquiries made) substitute—
(1) An enquiry under section 9A(1) of this Act is completed when an officer of the Board by notice (a “closure notice”) informs the taxpayer that he has completed his enquiries and states his conclusions.
In this section “the taxpayer” means the person to whom notice of enquiry was given.
(2) A closure notice must either—
(a) state that in the officer’s opinion no amendment of the return is required, or
(b) make the amendments of the return required to give effect to his conclusions.
(3) A closure notice takes effect when it is issued.
(4) The taxpayer may apply to the Commissioners for a direction requiring an officer of the Board to issue a closure notice within a specified period.
(5) Any such application shall be heard and determined in the same way as an appeal.
(6) The Commissioners hearing the application shall give the direction applied for unless they are satisfied that there are reasonable grounds for not issuing a closure notice within a specified period.”
(2) This paragraph applies—
(a) where the notice of enquiry is given after the passing of this Act, or
(b) where the enquiry is in progress immediately before the passing of this Act.
For the purposes of paragraph (b) an enquiry is in progress until the officer’s enquiries fall to be treated as completed under section 28A(5) of the Taxes Management Act 1970 (c. 9) (as that provision had effect apart from this Schedule).
9 (1) For section 28B of the Taxes Management Act 1970 (amendment of partnership statement where enquiries made) substitute—
(1) An enquiry under section 12AC(1) of this Act is completed when an officer of the Board by notice (a “closure notice”) informs the taxpayer that he has completed his enquiries and states his conclusions.
In this section “the taxpayer” means the person to whom notice of enquiry was given or his successor.
(2) A closure notice must either—
(a) state that in the officer’s opinion no amendment of the return is required, or
(b) make the amendments of the return required to give effect to his conclusions.
(3) A closure notice takes effect when it is issued.
(4) Where a partnership return is amended under subsection (2) above, the officer shall by notice to each of the partners amend—
(a) the partner’s return under section 8 or 8A of this Act, or
(b) the partner’s company tax return,
so as to give effect to the amendments of the partnership return.
(5) The taxpayer may apply to the Commissioners for a direction requiring an officer of the Board to issue a closure notice within a specified period.
(6) Any such application shall be heard and determined in the same way as an appeal.
(7) The Commissioners hearing the application shall give the direction applied for unless they are satisfied that there are reasonable grounds for not issuing a closure notice within a specified period.”.
(2) This paragraph applies—
(a) where the notice of enquiry is given after the passing of this Act, or
(b) where the enquiry is in progress immediately before the passing of this Act.
For the purposes of paragraph (b) an enquiry is in progress until the officer’s enquiries fall to be treated as completed under section 28B(5) of the Taxes Management Act 1970 (c. 9) (as that provision had effect apart from this Schedule).
10 (1) Schedule 1A to the Taxes Management Act 1970 (claims, &c. not included in returns) is amended as follows.
(2) For paragraph 7 (amendments of claims where enquiries made) substitute—
7 (1) An enquiry under paragraph 5 above is completed when an officer of the Board by notice (a “closure notice”) informs the claimant that he has completed his enquiries and states his conclusions.
(2) In the case of a claim for discharge or repayment of tax, the closure notice must either—
(a) state that in the officer’s opinion no amendment of the claim is required, or
(b) if in the officer’s opinion the claim is insufficient or excessive, amend the claim so as to make good or eliminate the deficiency or excess.
In the case of an enquiry falling within paragraph 5(1)(b) above, paragraph (b) above only applies so far as the deficiency or excess is attributable to the claimant’s amendment.
(3) In the case of a claim that is not a claim for discharge or repayment of tax, the closure notice must either—
(a) allow the claim, or
(b) disallow the claim, wholly or to such extent as appears to the officer appropriate.
(4) A closure notice takes effect when it is issued.
(5) The claimant may apply to the Commissioners for a direction requiring an officer of the Board to issue a closure notice within a specified period.
(6) Any such application shall be heard and determined in the same way as an appeal.
(7) The Commissioners hearing the application shall give the direction applied for unless they are satisfied that there are reasonable grounds for not issuing a closure notice within a specified period.
(8) In relation to a partnership claim, references in this paragraph to the claimant are to the person who made the claim or his successor.”.
(3) This paragraph applies—
(a) where the notice of enquiry is given after the passing of this Act, or
(b) where the enquiry is in progress immediately before the passing of this Act.
For the purposes of paragraph (b) an enquiry is in progress until the officer’s enquiries fall to be treated as completed under paragraph 7(4) of Schedule 1A to the Taxes Management Act 1970 (c. 9) (as that provision had effect apart from this Schedule).
11 (1) For section 31 of the Taxes Management Act 1970 (right of appeal) substitute—
(1) An appeal may be brought against—
(a) any amendment of a self-assessment under section 9C of this Act (amendment by Revenue during enquiry to prevent loss of tax),
(b) any conclusion stated or amendment made by a closure notice under section 28A or 28B of this Act (amendment by Revenue on completion of enquiry into return),
(c) any amendment of a partnership return under section 30B(1) of this Act (amendment by Revenue where loss of tax discovered), or
(d) any assessment to tax which is not a self-assessment.
(2) An appeal under subsection (1)(a) above against an amendment of a self-assessment made while an enquiry is in progress shall not be heard and determined until the enquiry is completed.
(3) A determination under section 9D or 12AE of this Act (choice between different Cases of Schedule D) may not be questioned on an appeal under this section.
(4) This section has effect subject to any express provision in the Taxes Acts, including in particular any provision making one kind of assessment conclusive in an appeal against another kind of assessment.
(1) Notice of an appeal under section 31 of this Act must be given—
(a) in writing,
(b) within 30 days after the specified date,
(c) to the relevant officer of the Board.
(2) In relation to an appeal under section 31(1)(a) or (c) of this Act—
(a) the specified date is the date on which the notice of amendment was issued, and
(b) the relevant officer of the Board is the officer by whom the notice of amendment was given.
(3) In relation to an appeal under section 31(1)(b) of this Act—
(a) the specified date is the date on which the closure notice was issued, and
(b) the relevant officer of the Board is the officer by whom the closure notice was given.
(4) In relation to an appeal under section 31(1)(d) of this Act—
(a) the specified date is the date on which the notice of assessment was issued, and
(b) the relevant officer of the Board is the officer by whom the notice of assessment was given.
(5) The notice of appeal must specify the grounds of appeal.
(6) On the hearing of the appeal the Commissioners may allow the appellant to put forward grounds not specified in the notice, and take them into consideration, if satisfied that the omission was not wilful or unreasonable.
(1) An appeal under section 31(1) of this Act shall be to the General Commissioners, subject to—
(a) section 31C of this Act (appeals to be brought to Special Commissioners),
(b) any provision made by or under Part 5 of this Act, and
(c) any other provision of the Taxes Acts providing for an appeal to be brought to the Special Commissioners to the exclusion of the General Commissioners.
(2) Subsection (1) above has effect subject to any election under section 31D of this Act (election to take appeal to Special Commissioners).
(1) Unless the Special Commissioners otherwise direct, an appeal under section 31(1)(a), (b) or (c) of this Act shall be to the Special Commissioners if—
(a) the appeal relates to a return in relation to which notice of enquiry has been given under section 9A(1) or 12AC(1) of this Act, and
(b) notice has been given under section 28ZA of this Act referring a question relating to the subject-matter of that enquiry to the Special Commissioners.
This applies even if the notice of referral was subsequently withdrawn.
(2) An appeal under section 31(1)(d) of this Act (appeal against assessment other than self-assessment) shall be to the Special Commissioners if the assessment was made—
(a) by the Board, or
(b) under section 350 of the principal Act.
(1) The appellant may elect (in accordance with section 46(1) of this Act) to bring before the Special Commissioners an appeal under section 31(1) of this Act that would otherwise be to the General Commissioners.
(2) Any such election above shall be disregarded if—
(a) the appellant and the inspector or other officer of the Board agree in writing, at any time before the determination of the appeal, that it is to be disregarded, or
(b) the General Commissioners have given a direction under subsection (5) below and have not revoked it.
(3) Where an election has been made under subsection (1) above, the inspector or other officer of the Board may refer the election to the General Commissioners.
(4) A reference under subsection (3) above must be made—
(a) after giving notice to the appellant, and
(b) before the determination of the appeal in respect of which the election has been made.
(5) On a reference under subsection (3) above the Commissioners shall, unless they are satisfied that the appellant has arguments to present or evidence to adduce on the merits of the appeal, direct that the election be disregarded.
(6) If at any time after giving a direction under subsection (5) above (but before the determination of the appeal) the General Commissioners are satisfied that the appellant has arguments to present or evidence to adduce on the merits of the appeal, they shall revoke the direction.
(7) A decision to give or revoke a direction under subsection (5) above shall be final.”.
(2) This paragraph applies in relation to—
(a) amendments of a self-assessment under section 9C of the Taxes Management Act 1970 (c. 9) as inserted by paragraph 4 of this Schedule,
(b) closure notices issued under section 28A(1) or 28B(1) of that Act as substituted by paragraphs 8 and 9 of this Schedule,
(c) amendments of partnership returns under section 30B(1) of that Act where notice of the amendment is issued after the passing of this Act, and
(d) assessments to tax which are not self-assessments where the notice of the assessment is issued after the passing of this Act.
12 (1) Schedule 1A to the Taxes Management Act 1970 (c. 9) (claims etc. not included in returns) is amended as follows.
(2) For paragraph 9(1) (appeals against amendments under paragraph 7) substitute—
“(1) An appeal may be brought against—
(a) any conclusion stated or amendment made by a closure notice under paragraph 7(2) above, or
(b) any decision contained in a closure notice under paragraph 7(3) above.
(1A) Notice of the appeal must be given—
(a) in writing,
(b) within 30 days after the date on which the closure notice was issued,
(c) to the officer of the Board by whom the closure notice was given.”.
(3) In paragraph 9(2) (extended time limit for appeal) for “(1)” substitute “(1A)(b)”.
(4) In paragraph 9(3) (Commissioners' power to vary amendment) for “amendment under paragraph 7(3) above” substitute “amendment made by a closure notice under paragraph 7(2) above”.
(5) In paragraph 9(4) (application of paragraph 8 where amendment varied) for “an amendment made under paragraph 7(3) above” substitute “any such amendment”.
(6) In paragraph 9(5) (claims disallowed) for “specified in a notice under paragraph 7(3A)” substitute “which was the subject of a decision contained in a closure notice under paragraph 7(3)”.
(7) In paragraph 10 (appeals to be heard by the Special Commissioners) for “an amendment under paragraph 7(3) above of” substitute “any conclusion stated or amendment made by a closure notice under paragraph 7(2) above relating to”.
(8) This paragraph applies in relation to closure notices issued under paragraph 7 of Schedule 1A to the Taxes Management Act 1970 as substituted by paragraph 10 of this Schedule.
13 (1) Part 11 of Schedule 18 to the Finance Act 1998 (c. 36) (company tax returns: supplementary provisions) is amended as follows.
(2) In paragraph 93 (general jurisdiction of Special or General Commissioners) after sub-paragraph (2) insert—
“(2A) Unless the Special Commissioners otherwise direct, an appeal under paragraph 30 or 34(3) shall be to the Special Commissioners if—
(a) the appeal relates to a return in relation to which notice of enquiry has been given under paragraph 24, and
(b) notice has been given under paragraph 31A referring a question relating to the subject-matter of that enquiry to the Special Commissioners.
This applies even if the notice of referral was subsequently withdrawn.”.
14 (1) Section 59B of the Taxes Management Act 1970 (c. 9) (payment of income tax and capital gains tax) is amended as follows.
(2) In subsection (4A)(a)—
(a) for “28A(5)” substitute “28A(1)”, and
(b) for “the officer’s enquiries are treated as” substitute “the enquiry is”.
(3) For subsection (5) substitute—
“(5) An amount of tax which is payable or repayable as a result of the amendment or correction of a self-assessment under—
(a) section 9ZA, 9ZB, 9C or 28A of this Act (amendment or correction of return under section 8 or 8A of this Act), or
(b) section 12ABA(3)(a), 12ABB(6)(a), 28B(4)(a), 30B(2)(a), 33A(4)(a) or 50(9)(a) of this Act (amendment of partner’s return to give effect to amendment or correction of partnership return),
is payable (or repayable) on or before the day specified by the relevant provision of Schedule 3ZA to this Act.”.
15 After Schedule 3 to the Taxes Management Act 1970 insert—
1 (1) This Schedule specifies the day by which tax has to be paid (or repaid) following the amendment or correction of a self-assessment.
(2) If in any case the general rules in section 59B(3) and (4) of this Act give a later day, those rules apply instead.
(3) The provisions of this Schedule have effect subject to section 55(6) and (9) of this Act (provisions as to postponement of payment, etc. in case of appeal).
2 (1) This paragraph applies where an amount of tax is payable or repayable as a result of the amendment of a self-assessment under section 9ZA of this Act (amendment of personal or trustee return by taxpayer).
(2) Subject to sub-paragraph (3) below, the amount is payable (or repayable) on or before the day following the end of the period of 30 days beginning with the day on which the notice of amendment was given.
(3) If section 9B(3) of this Act applies (amendment of self-assessment by taxpayer during enquiry: deferral of effect), then—
(a) if the amendment is taken into account as mentioned in paragraph (a)(i) of that subsection, paragraph 5 below (amendment of personal or trustee return by closure notice) applies accordingly; and
(b) if the amendment takes effect under paragraph (b) of that subsection on the issue of the closure notice, the amount is payable (or repayable) on or before the day following the end of the period of 30 days beginning with the day on which the closure notice was given.
3 (1) This paragraph applies where an amount of tax is payable or repayable as a result of the correction of a self-assessment under section 9ZB of this Act (correction of personal or trustee return by the Revenue).
(2) The amount is payable (or repayable) on or before the day following the end of the period of 30 days beginning with the day on which the notice of correction was given.
4 (1) This paragraph applies where an amount of tax is payable or repayable as a result of the amendment of a self-assessment under section 9C of this Act (amendment of personal or trustee return by Revenue to prevent loss of tax).
(2) The amount is payable (or repayable) on or before the day following the end of the period of 30 days beginning with the day on which the notice of amendment was given.
5 (1) This paragraph applies where an amount of tax is payable or repayable as a result of the amendment of a self-assessment under section 28A of this Act (amendment of personal or trustee return by closure notice following enquiry).
(2) The amount is payable (or repayable) on or before the day following the end of the period of 30 days beginning with the day on which the closure notice was given.
6 (1) This paragraph applies where an amount of tax is payable or repayable as a result of the amendment of a self-assessment under section 12ABA(3)(a) of this Act (consequential amendment of partner’s personal or trustee return where partnership return amended by taxpayer).
(2) The amount is payable (or repayable) on or before the day following the end of the period of 30 days beginning with the day on which the notice under section 12ABA(3)(a) of this Act was given.
7 (1) This paragraph applies where an amount of tax is payable or repayable as a result of the amendment of a self-assessment under section 12ABB(6)(a) of this Act (consequential amendment of partner’s personal or trustee return where partnership return corrected by Revenue).
(2) The amount is payable (or repayable) on or before the day following the end of the period of 30 days beginning with the day on which the notice under section 12ABB(6)(a) of this Act was given.
8 (1) This paragraph applies where an amount of tax is payable or repayable as a result of the amendment of a self-assessment under section 28B(4)(a) of this Act (consequential amendment of partner’s personal or trustee return where partnership return amended by closure notice).
(2) The amount is payable (or repayable) on or before the day following the end of the period of 30 days beginning with the day on which the notice under section 28B(4)(a) of this Act was given.
9 (1) This paragraph applies where an amount of tax is payable or repayable as a result of the amendment of a self-assessment under section 30B(2)(a) of this Act (consequential amendment of partner’s personal or trustee return where partnership return amended by Revenue to prevent loss of tax).
(2) The amount is payable (or repayable) on or before the day following the end of the period of 30 days beginning with the day on which the notice under section 30B(2)(a) of this Act was given.
10 (1) This paragraph applies where an amount of tax is payable or repayable as a result of the amendment of a self-assessment under section 33A(4)(a) of this Act (consequential amendment of partner’s personal or trustee return where partnership return amended by Revenue to afford relief in case of error or mistake).
(2) The amount is payable (or repayable) on or before the day following the end of the period of 30 days beginning with the day on which the notice under section 33A(4)(a) of this Act was given.
11 (1) This paragraph applies where an amount of tax is payable or repayable as a result of the amendment of a self-assessment under section 50(9)(a) of this Act (consequential amendment of partner’s personal or trustee return where partnership statement amended by Revenue following decision on appeal).
(2) The amount is payable (or repayable) on or before the day following the end of the period of 30 days beginning with the day on which the notice under section 50(9)(a) of this Act was given.”.
16 (1) Paragraphs 14 and 15 above apply where the relevant day is, or is after, the day on which this Act is passed.
(2) In sub-paragraph (1) the “relevant day” means the first day of the period of 30 days specified in the relevant provision of Schedule 3ZA to the Taxes Management Act 1970 (c. 9) (as inserted by paragraph 15 above).
17 (1) In section 28C of the Taxes Management Act 1970 (determination of tax in absence of personal or trustee return), in subsection (4) (effect of subsequent self-assessment on recovery proceedings), for “an officer of the Board has commenced any proceedings” substitute “proceedings have been commenced”.
(2) In paragraph 40 of Schedule 18 to the Finance Act 1998 (c. 36) (determination of tax in absence of company tax return), in sub-paragraph (4) (effect of subsequent self-assessment on recovery proceedings), for “the Inland Revenue have begun proceedings” substitute “proceedings have been begun”.
(3) This paragraph applies in relation to proceedings begun after the passing of this Act.
18 (1) Section 12AA of the Taxes Management Act 1970 (partnership return) is amended as follows.
(2) After subsection (10) insert—
“(10A) In this Act a “partnership return” means a return in pursuance of a notice under subsection (2) or (3) above.”.
Finance Act 2001