The legislation concerning correction and amendment of partnership returns is similar to that concerning the amendment of individual self-assessment returns (described in E1.211, E1.212) in that the partnership tax returns can be subject to correction by HMRC and amendment by the taxpayer.
In addition there are specific statutory provisions dealing with partner disputes around profit allocation as discussed at 'Dispute resolution for partnership returns' below.
Correction of partnership return by HMRC
HMRC may amend a partnership return to correct for obvious errors/omissions and anything else that appears incorrect 'in the light of information available'1.
The amendment is made by HMRC giving notice of the amendment to the partner who made the return (or his successor). The correction must be given within nine months of the delivery of the return or, where a return has been amended by the partnership, within nine months of that amendment2.
Where a partnership return is corrected this way, HMRC must also give notice to each partner, amending the personal (or company) return, in effect amending the self-assessment3.
The partner who made the return, or his successor, may reverse a correction (and consequent amendment of the partners self-assessment returns) by giving notice of rejection to HMRC within 30 days of the issue of the correction notice4.
It should be noted that HMRC corrections do not involve any judgement on the information in the return. If HMRC wish to challenge the basic information in the return, and the issue cannot be resolved by