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5. Compliance Checks (a)
HMRC may enquire into a corporation tax return provided that they first give written notice that
they are going to enquire.
(b)
The notice must be given within a year after the later of:
‣
12 months following the date the return is actually received by HMRC
‣
If the return is late, 12 months following the 31/1, 30/4, 31/7, 31/10 that next follows the
actual date of delivery.
(c)
An enquiry may be made due to:
‣
A suspicion income is understated
‣
Deductions being incorrectly claimed
‣
Other information in HMRC’s possession
‣
Being part of a random review process.
6. Determinations and Discovery assessments (a)
If a return is not delivered by the filing date, HMRC may issue a determination of the tax
payable within 3 years of the filing date.
(b)
If HMRC believe that not enough tax has been assessed for an accounting period they can
make a discovery assessment to collect the tax.
(c)
A discovery assessment can only be made if:
HMRC could not reasonably be expected to have been aware of a loss of tax and are supplied
with information to draw their attention to a contentious matter such as the use of a valuation
or estimate. HMRC can raise an assessment within 4 years from the end of the accounting
period; this is extended to 6 years if there is a careless error or 20 years if there is a deliberate
error or failure to notify a chargeability to tax.
7. Appeals and Disputes (a)
The company can appeal against amendments to the corporation tax return.
(b)
The appeal must be normally be made within 30 days of the amendment and must state the
grounds for appeal.
(c)
The appeals procedure is as per VAT - see chapter 25.
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