HMRC’s powers to open an enquiry into a return

Produced by Tolley in association with Guy Smith of inTAX Ltd
HMRC’s powers to open an enquiry into a return

The following Owner-Managed Businesses guidance note Produced by Tolley in association with Guy Smith of inTAX Ltd provides comprehensive and up to date tax information covering:

  • HMRC’s powers to open an enquiry into a return
  • Introduction
  • Correcting a return
  • Opening an enquiry
  • Individuals and sole traders
  • Partnerships
  • Companies
  • Amendments
  • Discovery

Introduction

An important clarification needs to be made to help in the understanding of this note. Whilst the legislation refers to an ‘enquiry’, HMRC now refers to enquiries as ‘compliance checks’.

As this note specifically covers HMRC’s powers, the term enquiry has been used to match up with the language used in the legislation. However, some of the other material referred to, such as factsheets, includes the term compliance checks rather than enquiry.

For the purpose of this note, an enquiry and a compliance check have the same meaning.

An HMRC Officer has the power to either correct a return or open an enquiry, and each of these processes is discussed below.

Correcting a return

An Officer can, within nine months of receiving a self assessment tax return or a corporation tax return, amend it without opening an enquiry in order to correct:

  1. an obvious error or omission. ‘Obvious’ means that there can be no doubt what the correct entry should be. This could include correcting arithmetical errors, transposition of incorrect figures and errors of principle

  2. anything else that the Officer has reason to believe is incorrect based on information already held and where no more information is needed

TMA 1970, s 9ZB; FA 1998, Sch 18, Part II, para 16

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