SCHEDULES

SCHEDULE 43General anti-abuse rule: procedural requirements

Notice to taxpayer of proposed counteraction of tax advantage

4AF1Corrective action by taxpayer

1

If the taxpayer takes the relevant corrective action before the beginning of the closed period mentioned in section 209(8), the matter is not to be referred to the GAAR Advisory Panel.

2

For the purposes of this Schedule the “relevant corrective action” is taken if (and only if) the taxpayer takes the steps set out in sub-paragraphs (3) and (4).

3

The first step is that—

a

the taxpayer amends a return or claim to counteract the tax advantage specified in the notice under paragraph 3, or

b

F2... the taxpayer takes all necessary action to enter into an agreement with HMRC (in writing) for the purpose of relinquishing that advantage.

4

The second step is that the taxpayer notifies HMRC—

a

that the taxpayer has taken the first step, and

b

of any additional amount which has or will become due and payable in respect of tax by reason of the first step being taken.

5

Where the taxpayer takes the first step described in sub-paragraph (3)(b), HMRC may proceed as if the taxpayer had not taken the relevant corrective action if the taxpayer fails to enter into the written agreement.

6

In determining the additional amount which has or will become due and payable in respect of tax for the purposes of sub-paragraph (4)(b), it is to be assumed that, where the taxpayer takes the necessary action as mentioned in sub-paragraph (3)(b), the agreement is then entered into.

7

F3Where a tax enquiry is in progress, no enactment limiting the time during which amendments may be made to returns or claims operates to prevent the taxpayer taking the first step mentioned in sub-paragraph (3)(a) before the tax enquiry is closed F4....

8

No appeal may be brought, by virtue of a provision mentioned in sub-paragraph (9), against an amendment made by a closure notice in respect of a tax enquiry to the extent that the amendment takes into account an amendment made by the taxpayer to a return or claim in taking the first step mentioned in sub-paragraph (3)(a).

9

The provisions are—

a

section 31(1)(b) or (c) of TMA 1970,

b

paragraph 9 of Schedule 1A to TMA 1970,

c

paragraph 34(3) of Schedule 18 to FA 1998,

d

paragraph 35(1)(b) of Schedule 10 to FA 2003, and

e

paragraph 35(1)(b) of Schedule 33 to FA 2013.