HMRC powers

By Tolley

The following Corporation Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • HMRC powers
  • Enquiries
  • Determinations
  • Discovery assessments
  • Conclusiveness of amounts in the return


CTSA enquiries take place to ensure that companies submit corporation tax returns which are both complete and correct.

From 1 April 2009 HMRC standardised the system for checking tax (including corporation tax, income tax and capital gains tax) and reference is now made to a compliance check procedure which encompasses enquiries, visits and inspections.

An enquiry can start for a number of reasons. The enquiry could be 'random', ie generated by HMRC’s computer system. Alternatively the return could be subject to a 'selected' enquiry where the officer has identified something on the return which he is not happy about, or wishes to ask further questions about.

There could also be 'routine' enquiries. This will apply particularly to very large companies where, simply because of the amount of profits and tax involved, the return will be subject to an enquiry virtually every year.

Selected and routine enquiries may be avoided by the company making complete and thorough disclosure on the return of everything HMRC may want to ask about. In particular, full analysis should be given of all contentious expenditure headings, such as legal and professional fees, repairs expenditure and entertaining (split between allowable staff entertaining and other disallowed entertaining). If this information is not supplied on the return, HMRC may start an enquiry to find the break down of the figures.

HMRC may give notice of an enquiry up to 12 months from the actual filing date for corporation tax returns filed on time. This deadline only applies to single companies and companies which are members of a small group. The deadline for large groups of companies is 12 months from the due filing date.

FA 1998, Sch 18, para 24

However, if the return is filed late, HMRC will have a minimum of 12 months to start their enquiries and the enquiry deadline will move

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