385.This Schedule deals with returns, enquiries, compliance powers, appeals and other matters. It also empowers the Treasury to amend certain parts of the Schedule by regulation.
386.This Part of the Schedule deals with returns. It provides for the contents of the return, defines delivery and covers amendment of a return.
387.Paragraph 1 deals with the contents of returns and allows for the Commissioners of HMRC to make provisions by regulation for the contents, form and method of delivery or to make different provision for different purposes. It provides the requirement of the return to include a declaration by the person that the return is complete and correct.
388.Paragraph 2 provides for the references in this Part to the delivery of an annual tax on enveloped dwellings return to be according to the requirements in section 159 and 161 or paragraph 1, or to the delivery of a return of adjusted chargeable amount to be according to the requirements in section 160 and 161 or paragraph 1.
389.Paragraph 3 provides for the amendment of a return and allows for the Commissioners of HMRC to require the form that amendment should to take. It also specifies the deadline by which the amendment to the return needs to be made.
390.Paragraph 4 provides for correction of returns by HMRC by notice to the chargeable person. HMRC can, by notice amend a return to correct obvious errors and omissions. The correction must be within nine months from the date the return is delivered. The chargeable person can amend the return so as to reject the correction, within three months of the date of issue of the notice of correction.
391.This Part of the Schedule deals with preservation of records.
392.Paragraph 5 sets out the duty of a person who is required to deliver a return to keep and preserve records, for the longer of:
six years from the end of the chargeable period,
the end of any enquiry, or
the end of the enquiry window (this may be after six years if the return is submitted very late).
Records to be kept must include:
all relevant documents relating to any relevant transaction, for example the contract of purchase, including financial records related to the transaction, and
records relating to the valuation of the dwelling.
393.Paragraph 6 allows for the preservation of information instead of original records. It permits records to be kept in an alternative form (such as microfiche or an electronic facsimile) as long as the information they contain is preserved.
394.Paragraph 7 provides a penalty for failure to keep and preserve records of a maximum of £3,000, with the exception that no penalty is incurred if the facts which would have been demonstrated by the records is provided to HMRC by other documentary evidence.
395.This Part of the Schedule deals with enquiries into returns. It provides for the notice and scope of enquiry, the amendment of self-assessment during enquiry, referral of questions to tribunal during enquiry and completion of enquiry.
396.Paragraph 8 provides for an officer of HMRC to make enquiries into returns within 12 months of the relevant date defined as; the later of the filing date or the date of delivery, or, in the case of an amendment, the date of the amendment.
397.Paragraph 9 deals with the scope of enquiry. The enquiry can be into the amount of tax chargeable or the question of whether tax is chargeable on the relevant person with respect to an interest. Where an enquiry is made into an amended return after the enquiry period for the return has passed, the enquiries are limited to matters which are amended or affected by the amendment.
398.Paragraph 10 provides for the amendment of the return by an officer of HMRC during course of enquiry to prevent loss of tax where the amount stated in the self assessment contained in the return is insufficient. Where an enquiry is made into an amended return, it limits this to matters which are amended or affected by the amended return.
399.Paragraph 11 deals with the referral of questions to the tribunal during enquiry. It requires notice of the referral to be given jointly by the relevant person and HMRC.
400.Paragraph 12 provides for the withdrawal of notice of referral made under paragraph 11 by HMRC or the person who made the return.
401.Paragraph 13 deals with the effect of referral under paragraph 11 on an enquiry. It provides that a closure notice or an application for a closure notice cannot be made while proceedings under paragraph 11 are in progress.
402.Paragraph 14 provides that the determination of any question by the Tribunals under paragraph 11 is binding on the parties. It requires the officer of HMRC to take the determination into account when making any amendments to the return and limits the question determined from being reopened.
403.Paragraph 15 sets out which are the relevant Lands and other Tribunals for the referral of questions under paragraph 11.
404.Paragraph 16 deals with the completion of enquiry and requires HMRC to issue a closure notice stating whether an amendment is required or not and making the amendment if necessary.
405.Paragraph 17 provides for the person who made the return to seek from a tribunal a direction that HMRC should issue a closure notice.
406.This Part of the Schedule deals with determinations by HMRC where no return is delivered.
407.Paragraph 18 allows HMRC to make a determination of tax chargeable if an annual tax on enveloped dwellings return or a return of adjusted chargeable amount return is not delivered by the relevant filing date. It limits the time period in which the determination has to be made to 4 years after the end of the chargeable period when the return should have been made.
408.Paragraph 19 provides that the determination has the same effect as self-assessment by the person for enforcement purposes.
409.Paragraph 20 provides that if, after a determination under paragraph 18, the person makes a self-assessment, that self assessment supersedes the determination unless the self-assessment is delivered after the time limits set out. It also provides that where proceedings have begun for recovery of the tax charged by the determination and that determination is superseded by self-assessment before proceedings are concluded, these proceedings may continue but instead for the amount due on the self-assessment.
410.This Part of the Schedule provides for HMRC assessments in certain defined cases.
411.Paragraph 21 deals with HMRC’s powers to make discovery assessments where an amount that should have been assessed under this Part has not been assessed, is less than it should be or relief has been given that is or has become excessive.
412.Paragraph 22 provides for an assessment to recover an excessive repayment of tax including any interest that may have been paid.
413.Paragraph 23 provides in paragraphs 24 to 27 for the references to ‘the taxpayer’ in relation to an assessment under paragraph 21 to be the chargeable person and in relation to an assessment under paragraph 22 to be the person referred to in paragraph 22(1).
414.Paragraph 24 sets out the circumstances where a discovery assessment can be made if the taxpayer has made a return. There are two circumstances; where the return is insufficient because the chargeable person’s behaviour (or a person acting on their behalf) was careless or deliberate, or, that HMRC could not reasonably be expected to be aware that the return insufficient when it was delivered. Furthermore no assessment can be made if the return was made in accordance with generally prevailing practice at the time it was delivered.
415.Paragraph 25 provides the time limit for assessments. The general time limit is 4 years after the end of the relevant chargeable period. This time limit is extended to 6 years where the person making the return has behaved carelessly and to 20 years where the loss of tax was brought about deliberately, or they failed to comply with their obligation to make returns or to make a relevant disclosure of any tax avoidance scheme. In cases of joint ownership where one of the taxpayers is an individual who has died and the assessment is to be made on that individual, the assessments must be made on personal representatives within 4 years of the date of death and can only cover chargeable periods within the 6 years prior to death.
416.Paragraph 26 provides the definition of a loss of tax brought about carelessly or deliberately for the purposes of paragraphs 24 and 25.
417.Paragraph 27 provides procedure for making an assessment on a chargeable person and the contents of the notice of assessment.
418.This Part of the Schedule deals with cases where a chargeable person is assessed twice in error. This is unlikely to occur since in almost all cases tax will only be collected as a result of the submission of a return. It also provides for cases where a chargeable person believes there has been an overpayment of tax.
419.Paragraph 28 provides that a person who believes they have suffered a double charge may claim relief. Claims must be made under the same provisions as Schedule 11A FA 2003 (Stamp Duty Land Tax: Claims not included in returns).
420.Paragraph 29 provides that a person may make a claim for repayment of an amount of Annual Tax on Enveloped Dwellings (ATED) that they believe they have overpaid or ATED that has been brought into charge that they believe is not payable. This is subject to the restrictions set out in paragraph 31.
421.Paragraph 31 provides that the Commissioners for HM Revenue & Customs are not liable to give effect to a claim for relief in respect of an overpayment or over-assessment of ATED where a claim falls within a case described in this paragraph (paragraph 31).
422.Paragraph 30 also sets out cases in which the Commissioners are not liable to give relief:
Case A is where the claimant made a mistake in a claim or in failing to make a claim;
Case B is where it is possible for the claimant to take other steps under the ATED legislation to remedy the overpayment or over-assessment;
Case C is where the claimant could have taken other steps under the ATED legislation when they first knew, or ought reasonably to have known, of the overpayment or over-assessment, but that time has passed;
Case D is where the grounds of the claim have already been put to the tribunal or HMRC (and treated as determined by a tribunal) by the claimant in the course of an appeal;
Case E is where the claimant knew or ought reasonably to have known the grounds of the claim at a time when those grounds could have been put forward during an appeal to a court or tribunal (or before the date on which the Claimant withdrew an appeal to a court or tribunal);
Case F is where the amount was paid or is liable to be paid following proceedings to enforce payment or by an agreement between the chargeable person and HMRC in connection to those proceedings; and
Case G is where the amount was calculated by mistake and was in accordance with the practice generally prevailing at that time. Case G does not apply where tax is charged contrary to EU law.
423.Paragraph 31 provides that a claim cannot be made more than 4 years after the end of the chargeable period to which it relates and that a claim must be made under the same provisions as Schedule 11A FA 2003 (Stamp Duty Land Tax: Claims not included in returns).
424.Paragraph 32 ensures where a land transaction was entered into by a partnership, a claim under paragraph 30 must be made by all the partners who would have been liable to ATED at the start of relevant chargeable period or their representatives.
425.Paragraph 33 provides where the grounds on which a claim is made under paragraph 30 also provide grounds for making a discovery assessment, the normal restrictions on making such assessments do not apply to an assessment on the claimant. This is extended to assessments on partners who were members of the partnership at the effective date of a transaction and any who subsequently join the partnership.
426.Paragraph 34 extends claims to amounts paid under a contract settlement with HMRC and includes specific rules in relation to these claims.
427.This part of the Schedule deals with appeals. The rights of appeal, the settlement of appeals by agreement and postponement applications are similar to those for Stamp Duty Land Tax.
428.Paragraph 35 provides a right of appeal against:
amendments of self-assessment to prevent loss of tax (paragraph 10);
a conclusion stated or amendment made by a closure notice (paragraph 16);
an HMRC determination under paragraph 18;
a discovery assessment (paragraph 21); and
an assessment to recover overpaid tax (paragraph 22).
429.Paragraph 36 deals with the notice of appeal and the time limit of 30 days from the specified date, which is the date of the notice of amendment, closure, determination or assessment. The notice must state the grounds of the appeal. The paragraph also sets out the restricted grounds for an appeal against a determination.
430.Paragraph 37 provides the rules for appeals made outside the time limits set in paragraph 36. HMRC may agree to the late appeal or the tribunal may give its permission for the late appeal.
431.Paragraph 38 sets out that following notice of an appeal to HMRC, a number of steps may be taken for a review of the matter in question to be required by, or offered to, the appellant, or for the matter to be referred to the tribunal. There are specific rules for appeals to be notified to the tribunal after a review has commenced.
432.Paragraph 39 sets out the rules where the appellant has notified HMRC that they require a review of the matter in question.
433.Paragraph 40 sets out the rules for when HMRC offer an appellant a review of the matter in question. Including what happens if the appellant does not accept HMRC’s offer and restrictions upon HMRC’s ability to offer a review.
434.Paragraph 41 sets out the nature of the review under paragraphs 40 and 41 including the conclusions that can be reached and time limits for HMRC to provide its conclusions to the appellant, and what conclusion is deemed to be reached in the absence of HMRC making its conclusion.
435.Paragraph 42 sets out that the conclusion of the review has the effect of a settlement agreement (see paragraph 47) unless the appellant notifies the appeal to the tribunal.
436.Paragraph 43 sets out the rules for how an appellant notifies the tribunal of their appeal after they have requested a review including the time limits and restrictions for such notification.
437.Paragraph 44 sets out the rules for how an appellant notifies the tribunal of their appeal after they have been offered a review by HMRC including the time limits and restrictions for such notification.
438.Paragraph 45 provides interpretations of expressions used for the purposes of paragraphs 39 to 45.
439.Paragraph 46 sets out the rules for how appeals can be settled by agreement between an appellant and HMRC including the time limit for the taxpayer to withdraw from such an agreement.
440.Paragraph 47 provides that an appellant must still pay the tax assessed even where they have made an appeal. However, this requirement is subject to paragraphs 49 and 50.
441.Paragraph 48 sets out the rules for an appellant to make an application for the payment of tax to be postponed where they believe that the amendment or assessment overcharges the appellant to tax or the amount assessed is excessive. The paragraph also provides the time limits for making the application and also what action they can take if HMRC do not agree with to their application.
442.Paragraph 49 sets out the rules that apply where HMRC and the appellant are in agreement as to the amount of tax to be postponed.
443.Paragraph 50 sets out the actions that a tribunal can take in relation to an appeal notified to it, namely, to require the assessment; to be reduced, to stand, or to be increased.
444.Paragraph 51 provides that the decision of the tribunal is final and conclusive subject to any further appeal permitted by the rules in the Tribunals, Courts and Enforcement Act 2007 or in this Part.
445.Paragraph 52 provides rules for where there has been a determination of an appeal and tax is payable or has been overpaid as a result.
446.Paragraph 53 provides that where the taxpayer or HMRC appeal against the decision of the tribunal that the tax determined by the tribunal or court that has made the determination is to be payable or repayable notwithstanding that the further appeal is pending.
447.Paragraph 54 sets out what is meant by references to “the tribunal” including to which tribunals different matters must be referred.
448.Paragraph 55 provides for where two companies (potentially one as a member of a partnership) are jointly entitled to a single-dwelling interest for them to be jointly and severally liable and that they are obliged to deliver a single return.
449.Paragraph 56 provides the requirement for all the responsible partners of a partnership to be responsible for anything required by section 159, or section 160 or this Schedule.
450.Paragraph 57 provides for meaning of “filing date” for an annual tax on enveloped dwellings return or a return of adjusted chargeable amount.
