Revenue Note for Guidance

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Revenue Note for Guidance

956 Inspector’s right to make enquiries and amend assessments

Summary

An inspector, in making or amending an assessment on a chargeable person, may act on the basis of any information supplied in that person’s return. However, this does not preclude an inspector from making such enquiries or taking such actions, within his/her powers, as he or she considers are necessary to satisfy himself or herself as to the accuracy of the information furnished in a return, nor does it prevent the inspector (subject to the 4-year rule in section 955(2)) from amending or further amending an assessment in such a way as he/she considers appropriate. There is also a 4-year time limit for an inspector to make enquiries and take actions to verify information in a return unless the inspector has reasonable grounds to believe that the return was completed in a fraudulent or negligent manner. A right of appeal against enquiries made or actions taken outside the 4-year time limit is also included.

Details

Inspector’s right of enquiry

(1) An inspector, in making or amending an assessment on a chargeable person, may act on the basis of the information supplied in that person’s return. However, the inspector is not precluded from making any enquiries or taking any actions within his/her power as he/she considers are necessary to be satisfied as to the accuracy of the information furnished in the return, nor does it prevent the inspector (subject to the 4-year rule in section 955(2)) from amending or further amending an assessment in such a way as he/she considers appropriate. Enquiries and actions to verify information in a return can only be made outside a period of 4 years after the end of the tax year or accounting period in which the return is made where the inspector has reasonable grounds for believing that the return was completed in a fraudulent or negligent manner.

Chargeable person’s right of appeal

(2) There is provision for appeal where a chargeable person is aggrieved with an inspector’s enquiry or action being made outside the relevant 4 year period. The appeal must be made within 30 days of the disputed enquiry or action and is heard by the Appeal Commissioner as if it were an appeal against an assessment. All actions arising as a result of the inspector’s enquiry or action are to be suspended pending the outcome of the appeal. If the appeal is successful, the inspector is precluded from further pursuit of the enquiry or action. If it is unsuccessful, the inspector may continue with the enquiry or action.

Relevant Date: Finance Act 2020