© 2024 by Michael Firth KC, Gray's Inn Tax Chambers
Contact: michael.firth@taxbar.com
Procedure.Tax
For additional search results use Google and enter:
site:procedure.tax [search term]
B1: Duty to submit a direct tax return
Meaning of return
“ ‘return’ includes any statement or declaration under the Taxes Acts” (TMA 1970, s.118(1))
​
No duty to submit a return unless notice given by HMRC
“In other words, the delivery of a return containing information under Section 8(1)(a) must contain the information which is requested by HMRC pursuant to a notice previously given to that taxpayer. And that notice identifies the information which that particular taxpayer may be required to provide in the return under Section 8(1)(a). In other words, they are two parts of the same process. The process is instigated by HMRC giving a notice to a taxpayer to make a return, such notice including the information which that return must include; and the taxpayer responding by making and delivering that return to HMRC.” (Wood v. HMRC [2018] UKFTT 74 (TC), §36, Judge Popplewell).
​
No penalty for late return if no notice
“Slightly oddly, if a taxpayer submits a return, notice for which he was never given, then the statutory pre-requisite for a return under Section 8(1)(a) is unfulfilled and thus Schedule 55 has nothing to bite on.” (Wood v. HMRC [2018] UKFTT 74 (TC), §38, Judge Popplewell).
Duty to notify HMRC of chargeability
Income tax and capital gains tax
“(1) Every person who--

(a) is chargeable to income tax or capital gains tax for any year of assessment, and
(b) falls within subsection (1A) or (1B),
shall, subject to subsection (3) below, within the notification period, give notice to an officer of the Board that he is so chargeable.
(1A) A person falls within this subsection if the person has not received a notice under section 8 requiring a return for the year of assessment of the person's total income and chargeable gains.
(1B) A person falls within this subsection if the person--
(a) has received a notice under section 8 requiring a return for the year of assessment of the person's total income and chargeable gains, and
(b) has received a notice under section 8B withdrawing the notice under section 8.” (TMA 1970, ss.7(1) – (1B))
Corporation tax
“(1) A company which--
(a) is chargeable to tax for an accounting period, and
(b) has not received a notice requiring a company tax return,
must give notice to an officer of Revenue and Customs that it is so chargeable. (FA 1998, Sch 18, para 2(1)).
​
- Corporation tax includes amounts assessable as if they were corporation tax
​
"In this Schedule “tax” means corporation tax including, except as otherwise indicated, any amount assessable or chargeable as if it was corporation tax.
Amounts are assessable or chargeable as if they were corporation tax under—
section 269DA of the Corporation Tax Act 2010 (surcharge on banking companies),
section 455 of [that Act]6]2 (tax on loan or advance made by close company to a participator),
section 464A of that Act (tax on other benefit conferred on participator),
section 330(1) of that Act (supplementary charge in respect of ring fence trades), and
step 5 in section 371BC(1) of the Taxation (International and Other Provisions) Act 2010 (controlled foreign companies), and
paragraphs 50 and 51 of Schedule 19 to the Finance Act 2011 (the bank levy)." (FA 1998, Sch 18, para 1)
​
- Trustees
​
"(9) For the purposes of this Act the relevant trustees of a settlement are—
(a) in relation to income (other than gains treated as arising under Chapter 9 of Part 4 of ITTOIA 2005, the persons who are trustees when the income arises and any persons who subsequently become trustees; and
(aa) in relation to gains treated as arising under Chapter 9 of Part 4 of ITTOIA 2005, the persons who are trustees in the year of assessment in which the gains arise and any persons who subsequently become trustees; and
(b) in relation to chargeable gains, the persons who are trustees in the year of assessment in which the chargeable gains accrue and any persons who subsequently become trustees." (TMA 1970, s.7(9))
​
"(2) In the case of persons who are chargeable as mentioned in subsection (1) above as the relevant trustees of a settlement, that subsection and subsections (1A) to (1C) have effect as if references to a notice under section 8 were references to a notice under section 8A." (TMA 1970, s.7(2))
​
- Excluded chargeable persons: no gains and all tax paid at source
​
"(3) A person shall not be required to give notice under subsection (1) above in respect of a year of assessment if for that year—
(a) the person's total income consists of income from sources falling within subsections (4) to (7) below,
(b) the person has no chargeable gains, and
(c) the person is not liable to a high income child benefit charge.
(4) A source of income falls within this subsection in relation to a year of assessment if—
(a) all payments of, or on account of, income from it during that year, and
(b) all income from it for that year which does not consist of payments,
have or has been taken into account in the making of deductions or repayments of tax under PAYE regulations.
(5) A source of income falls within this subsection in relation to any person and any year of assessment if all income from it for that year has been or will be taken into account—
(a) in determining that person's liability to tax, or
(b) in the making of deductions or repayments of tax under PAYE regulations.
(6) A source of income falls within this subsection in relation to any person and any year of assessment if all income from it for that year is—
(a) income from which income tax has been deducted; or
(b) income from or on which income tax is treated as having been deducted or paid,
(c) …
and that person is not for that year liable to tax at a rate other than the basic rate, the dividend nil rate, the Scottish basic rate, a Scottish rate below the Scottish basic rate, the Scottish intermediate rate, the Welsh basic rate, the dividend ordinary rate, the savings nil rate or the starting rate for savings.
(6A) A source of income falls within this subsection in relation to any person and any year of assessment if for that year—
(a) all income from the source is dividend income (see section 19 of ITA 2007), and
(b) the person—
(i) is UK-resident,
(ii) is not liable to tax at the dividend ordinary rate,
(iii) is not liable to tax at the dividend upper rate,
(iv) is not liable to tax at the dividend additional rate, and
(v) is not charged to tax under section 832 of ITTOIA 2005 (relevant foreign income charged on remittance basis) on any dividend income.
(7) A source of income falls within this subsection in relation to any person and any year of assessment if all income from it for that year is income on which he could not become liable to tax under a self-assessment made under section 9 of this Act in respect of that year." (TMA 1970, s.7(3) - (7))
- Excluded chargeable persons: simple assessments
​
"(2A) A person who—
(a) falls within subsection (1A) or (1B), and
(b) is notified of a simple assessment for the year of assessment,
is not required to give notice under subsection (1) for that year unless the person is chargeable to income tax or capital gains tax for the year of assessment on any income or gain that is not included in the assessment." (TMA 1970, s.7(2A))
​
See further, below, on simple assessments.
​
- Excluded chargeable person: early CGT return for disposals of land shows full liability
​
"(1) A person is not required to give a notice under section 7 of TMA 1970 merely by reference to a chargeable gain accruing on a disposal if—
(a) the person delivers a return under this Schedule in respect of the disposal, and
(b) the return is delivered before the end of the notification period within the meaning of that section.
(2) But sub-paragraph (1) does not apply if the amount of capital gains tax notionally chargeable on the person as at the filing date for the return (as determined in accordance with paragraph 7) is less than the amount of capital gains tax for which the person is liable for the tax year concerned." (FA 2019, Sch 2, para 18)
​
See further: B4: Other returns
​
Limited return option: chargeable gains not exceeding annual exempt amount
​
"(1) This section applies if—
(a) the amount of chargeable gains accruing to a person in a tax year does not exceed the annual exempt amount for the year applicable to the person under section 1K of the 1992 Act,
(b) the total amount or value of the consideration for all chargeable disposals of assets made by the person in the year does not exceed four times that annual exempt amount,
(c) the person is not a remittance-basis individual for the year, and
(d) a notice under section 8 or 8A is given to the person requiring information for the purpose of establishing the amount in which the person is chargeable to capital gains tax for the year.
(2) If the person makes a statement confirming the matters set out in subsection (1)(a) to (c), the statement constitutes sufficient compliance with that requirement.
(3) For the purposes of this section every disposal is a “chargeable disposal” other than—
(a) a disposal on which any gain accruing is not a chargeable gain, and
(b) a disposal to which section 58 of the 1992 Act applies (spouses and civil partners)." (TMA 1970, s.8C)
​
Time limits for notice of chargeability
​
- Income tax time limit: 6 months after end of tax year
​
“(1C) In subsection (1) "the notification period" means--
(a) in the case of a person who falls within subsection (1A), the period of 6 months from the end of the year of assessment, or
(b) in the case of a person who falls within subsection (1B)—
(i) 
the period of 6 months from the end of the year of assessment, or
(ii)
the period of 30 days beginning with the day after the day on which the notice under section 8 was withdrawn,
whichever ends later.” (TMA 1970, s.7(1C))
​
- Corporation tax time limit: 12 months after end of accounting period
“(2) The notice must be given within twelve months from the end of the accounting period.” (FA 1998, Sch 18, para 2(2))
​
Form of notice of chargeability
​
- Specific notice of chargeability required
“As Walton J said in the case of Nicholson v Morris quoted in paragraph 38 above it is not the duty of HMRC to search their records of DCL for information about Mr Taiwo’s personal income.” (Taiwo v. HMRC [2018] UKFTT 34 (TC), §48, Judge Rankin)
​
- Should indicate what sort of tax T is liable for
"Both parties accept that there is no specified wording for a taxpayer to notify HMRC of their chargeability to tax. However, the wording used by the Agent in his six letters to HMRC falls far short of the ordinary meaning of s7 TMA 1970. Upon receipt of the letters dated 5 February 2018 and 16 January 2019 HMRC were given no information as to what sort of tax the Appellant was liable for, no indication of the amount and no information concerning the source of the taxable income. The letter dated 16 January 2019 did not refer to the previous letter dated 5 February 2018 and did not query why no response had been received." (Owens v. HMRC [2024] UKFTT 192 (TC), Judge Rankin)
​
- Unsolicited tax return showing a profit is a notice of chargeability
“We reject HMRC’s analysis of the position. In our view the wording of the relevant sections is absolutely clear and provide no basis for the submission that by making an unsolicited return the taxpayer has waived the requirement for a notice under s 8. The legislation makes no provision for such a waiver to be effective. If Parliament had meant the submission of a voluntary return to amount to a waiver of the requirement to give notice then it could have said so…In our view the correct analysis of the position is that the return that Mr Revell made is in fact to be characterised as a notice of liability to income tax pursuant to s 7 TMA rather than a self-assessment return at all.” (Revell v. HMRC [2016] UKFTT 97 (TC), §§38…42).
​
“If a person files an unsolicited tax return for a particular year indicating that he or she is chargeable to income tax or capital gains tax for that year, it would seem logical to treat the unsolicited return as a notice under s.7(1). Indeed, given the broad definition of “return” in s.118(1), a notice of chargeability under s.7(1) would by definition be a kind of return, albeit not a return under s.8. The Tribunal sees no reason in logic why a notice of chargeability under s.7(1) could not be submitted in the same form as a return under s.8.” (Weerasinghe v. HMRC [2013] UKFTT 144 (TC), §39)
​
Notice to deliver personal return
​
"(1) For the purpose of establishing the amounts in which a person is chargeable to income tax and capital gains tax for a year of assessment, and the amount payable by him by way of income tax for that year, he may be required by a notice given to him by an officer of the Board—
(a) to make and deliver to the officer, a return containing such information as may reasonably be required in pursuance of the notice, and
(b) to deliver with the return such accounts, statements and documents, relating to information contained in the return, as may reasonably be so required." (TMA 1970, s.8(1)).
​
See further A5: Communication
​
Place where notice may be served not prescriptive
“That having been said, section 115 of the Taxes Management Act 1970 is not prescriptive. HMRC can validly serve a notice by some other means, such as handing the notice to a director in person, or by giving it to the company’s agent, provided that HMRC has effectively communicated the content of the notice to the recipient (see Partito Media Services at [38]).” (AEI Group Ltd v. HMRC [2015] UKFTT 290 (TC), §64).
​
May be sent to last known place of residence
“As a notice to file is a statutory document then s 115(2) TMA 1970 allows it to be given to a person by serving it addressed to that person at his usual or last known place of residence. I have no reason to think it was not properly addressed and stamped and therefore, by s 7 Interpretation Act 1970 it is treated as having been duly served (and so given) unless the contrary is proved.” (Hogg v. HMRC [2017] UKFTT 538 (TC), §48, Judge Richard Thomas).
Different part of HMRC were aware of the new address
“HMRC say that the appellant did not notify the EORI team of their VAT number and had they done so they would have been issued with a new EORI based on the VAT number. This would have resulted in the EORI records being updated with the new address…In our view this is all irrelevant. It is clear now that the appellant informed HMRC as an entity of its new address in September 2015, but the original demand notes were issued to the old address, Cavendish.” (Sharya UK Ltd v. HMRC [2018] UKFTT 72 (TC), §§59…60).
Burden on HMRC to prove notice properly sent
“As regards the burden of proof, it is for HMRC to establish that a Section 8 TMA compliant notice was sent in a properly addressed pre-paid envelope, to the appellant at his usual or last known place of residence…If they can establish that, then the burden of proof shifts to the appellant to show (or to prove) “the contrary".” (Wood v. HMRC [2018] UKFTT 74 (TC), §§59…60, Judge Popplewell applying Interpretation Act 1970, s.7).
“Adequate proof is a necessity; not a luxury. We do not consider that we can be, or should be, satisfied, on the balance of probabilities, that a Notice to File was posted by an officer of HMRC to the appellant simply based upon the computer held note “Return Issued Date” alongside which appears “6/4/15”. Even if the Notice to File was issued on 6 April 2015 there is, quite literally, no evidence or even any note to the effect that it was dispatched to the appellant at a specified address. That is a fundamental link in the chain upon which liability to a penalty depends. A fact that it is essential for the respondents to prove cannot be assumed. An inference of fact may well be legitimate in certain factual circumstances, but it is very clear in our jurisprudence that an inference of fact will only be drawn if it is the only reasonable inference available to the fact finding body, whether it be a judge or a jury.” (Jacks v. HMRC [2017] UKFTT 613 (TC), §13, Judge Geraint Jones QC).
Address notice sent to inferred from previous receipt of notices
“There is no indication in the document bundle of the address that was used in relation to the notice to file for 2014-15. But the return for 2013-14 was obviously received and there is nothing in the SA Notes to indicate either that an address was changed or that an “RLS” (Returned letter service”) signal was set at any time to indicate that post had not been delivered.” (Hogg v. HMRC [2017] UKFTT 538 (TC), §47, Judge Richard Thomas).
Presumption of regularity
​
“We consider, on the basis of this evidence, and the presumption of regularity, that HMRC did indeed send what they considered to be notices to file, to that address, on the dates evidenced by the return summaries. And the appellant has been unable to provide any evidence or submissions to the contrary.” (Wood v. HMRC [2018] UKFTT 74 (TC), §64, Judge Popplewell)
Invalid notice requiring the wrong type of return
“Since Mr Hogg is not a trustee of any settlement the appropriate return and notice to file cannot be one under s 8A TMA. It must perforce be one under s 8 TMA. But HMRC refer in the correspondence in the bundle to the return as a “Trust and Estate Return” and to its being on form SA900.” (Hogg v. HMRC [2017] UKFTT 538 (TC), §52, Judge Richard Thomas).
Evidence of issuing notice held by HMRC
“Furthermore, it is often the case (and it is certainly true in this case), that HMRC have included in the bundle what they say is evidence that a notice to file was given to the taxpayer. They do this by way of extracts from their computer records entitled Self-Assessment "Return Summary" where against the words "Return Issued Type" the words "Notice to File" are included. Then follow the dates on which the return issued was given, and was due (both in paper and electronic form) below which there is a Date of Receipt.” (Wood v. HMRC [2018] UKFTT 74 (TC), §48, Judge Popplewell).
Computer record not necessarily sufficient
​
“Simply exhibiting a computer record on which the words “Notice to File" are included does not, in our view, discharge HMRC's evidential burden of establishing that a notice in the form required by Section 8 was sent (let alone given) to this particular taxpayer in respect of each of the four years in question in this appeal. It seems to us that HMRC, simply by including these computer record extracts, are asking us to speculate that what was sent to the appellant did comprise a notice in the form which complies with Section 8 TMA. But we are not prepared to so speculate. If HMRC had included a copy of a notice to file with the bundle, and asked us to speculate that a combination of the computer record and the document itself was sufficient to discharge their evidential burden, then we would have been more sympathetic. At least in those circumstances we would have been able to see the information on the notice to file and check that it did comply with Section 8.” (Wood v. HMRC [2018] UKFTT 74 (TC), §53, Judge Popplewell).
​
​
Automated notices valid
"(1) Anything capable of being done by an officer of Revenue and Customs by virtue of a function conferred by or under an enactment relating to taxation may be done by HMRC (whether by means involving the use of a computer or otherwise).
(2) Accordingly, it follows that HMRC may (among other things)—
(a) give a notice under section 8, 8A or 12AA of TMA 1970 (notice to file personal, trustee or partnership return);
(b) amend a return under section 9ZB of that Act (correction of personal or trustee return);
(c) make an assessment to tax in accordance with section 30A of that Act (assessing procedure);
(d) make a determination under section 100 of that Act (determination of penalties);
(e) give a notice under paragraph 3 of Schedule 18 to FA 1998 (notice to file company tax return);
(f) make a determination under paragraph 2 or 3 of Schedule 14 to FA 2003 (SDLT: determination of penalties).
(3) Anything done by HMRC in accordance with subsection (1) has the same effect as it would have if done by an officer of Revenue and Customs (or, where the function is conferred on an officer of a particular kind, an officer of that kind).
(4) In this section— "HMRC" means Her Majesty's Revenue and Customs; references to an officer of Revenue and Customs include an officer of a particular kind, such as an officer authorised for the purposes of an enactment." (FA 2020, s.103)
"[36] We are satisfied that Parliament intended to validate all the notices referred to in s 103(2) where they are issued by HMRC as a department, including such notices issued using a computer. That is the ordinary and natural meaning of the words used in s 103(3).The reference to HMRC in this context is plainly to HMRC as a department. It is difficult to see what useful purpose Mr Ridgway’s narrow construction would serve. There has been no suggestion that individual Commissioners have exercised the functions of officers of HMRC in circumstances where there has been doubt as to their power to do so...
...
[39] If we were in any doubt about the effect of s 103, the Explanatory Note would resolve that doubt. The context in which it was enacted was to confirm HMRC’s administrative practices and to give certainty to taxpayers who receive a notice from HMRC that they should treat the notice as valid. It was not in the context of ensuring that individual Commissioners could perform actions required to be performed by officers." (Allam v. HMRC [2021] UKUT 291 (TCC), Edwin Johnson J and Judge Cannan)
​
See also A4: Defective form
​
Commencement
​
"(5) This section is treated as always having been in force.
(6) However, this section does not apply in relation to anything mentioned in subsection (1) done by HMRC if— (a) before 11 March 2020, a court or tribunal determined that the relevant act was of no effect because it was not done by an officer of Revenue and Customs (or an officer of a particular kind), and (b) at the beginning of 11 March 2020, the order of the court or tribunal giving effect to that determination had not been set aside or overturned on appeal." (FA 2020, s.103)
​
Previous position
​
"[57] We agree with the taxpayers that HMRC’s evidence does not establish that a specific, identified HMRC officer took the decision to send s8 notices to them. However, as we have explained in our discussion of HMRC’s Grounds 3 and 4, the statute does not require a specific officer to be identified. The taxpayers also argued that HMRC’s evidence did not even demonstrate that HMRC officers generally had authorised the giving of s8 notices (since the actual selection exercise was performed by computer and hard copy notices were physically despatched by Communisis). We reject those submissions. HMRC officers decided on applicable criteria and taxpayers meeting those criteria received s8 notices. The fact that a computer performed the task of identifying taxpayers who met the criteria does not alter the conclusion that HMRC officers authorised the giving of notices to taxpayers who were so identified. Nor does it matter that Communisis physically sent out hard copy s8 notices. The legislation does not require officers personally to place stamped letters in post-boxes. It is enough that officers have decided the criteria to be satisfied for a taxpayer to receive a s8 notice leaving the implementation of that decision to administrative staff and contractors." (HMRC v. Rogers and Shaw [2019] UKUT 406 (TCC), Zacaroli J and Judge Richards)
​
Trustee returns
"(1) For the purpose of establishing the amounts in which the relevant trustees of a settlement, and the settlors and beneficiaries, are chargeable to income tax and capital gains tax for a year of assessment, and the amount payable by him by way of income tax for that year, an officer of the Board may by a notice given to any relevant trustee require the trustee—
(a) to make and deliver to the officer, on or before the day mentioned in subsection (1A) below a return containing such information as may reasonably be required in pursuance of the notice, and
(b) to deliver with the return such accounts, statements and documents, relating to information contained in the return, as may reasonably be so required;
and a notice may be given to any one trustee or separate notices may be given to each trustee or to such trustees as the officer thinks fit." (TMA 1970, s.8A).
​
Executors and personal representatives
Query whether it is valid for HMRC to send executors the trustee return
“The removal of the reference in s 8(1) as enacted to “his income” establishes beyond doubt that an executor can be within s 8 TMA and is not within not s 8A as regards a return of the income and chargeable gains of the estate of which they are executor. But an executor who registers to file online is not sent an SA100, the tax return which individuals returning their own income file, but an SA900…The position with executors is different as the return they are expected to file is not an SA 100 nor are there special pages to be added to that return. The return they are expected to file is the SA900, the same return as is used by trustees and which is clearly a return under s 8A TMA when a trustee is required to file it. Is it possible to have a return which is partly required under s 8 when it is an executor required to file it, and partly under s 8A when it is a trustee? I am very doubtful whether this is possible, but I might be persuaded if I had been shown a document minuting the prescription by the Board under s 113(1) TMA to the appropriate effect, although even if I were to see that document I would still need to consider whether it was legally possible to prescribe the same document as a return under two different sections of TMA.” (Hogg v. HMRC [2017] UKFTT 538 (TC), §§58…59, Judge Richard Thomas).
Return not required
​
“Personal representatives may make an informal payment of the total liability for the whole period of administering the deceased’s estate if certain conditions are met. The main condition is that the total tax liability (income tax plus capital gains tax) for the entire administration period is less than £10,000. The other conditions are that
· the probate/confirmation value of the estate is less than £2.5m, and
· the proceeds of assets sold in any one tax year are less than £250,000, and
· the estate is not regarded as complex, so it can be dealt with without the personal representatives having to complete a Self Assessment return.” (TSEM 7410).
Partnership returns
(1) Where a trade, profession or business is carried on by two or more persons in partnership, for the purpose of facilitating the establishment of the following amounts, namely—
(a) the amount in which each partner chargeable to income tax for any year of assessment is so chargeable and the amount payable by way of income tax by each such partner, and
(b) the amount in which each partner chargeable to corporation tax for any period is so chargeable,
an officer of the Board may act under subsection (2) or (3) below (or both).
(1A) For the purposes of subsection (1) above—
(a) the amount in which a partner is chargeable to income tax or corporation tax is a net amount, that is to say, an amount which takes into account any relief or allowance for which a claim is made; and
(b) the amount payable by a partner by way of income tax is the difference between the amount in which he is chargeable to income tax and the aggregate amount of any income tax deducted at source.
...
[Notice to all partners]
(2) An officer of the Board may by a notice given to the partners require such person as is identified in accordance with rules given with the notice or a successor of his—
(a) to make and deliver to the officer in respect of such period as may be specified in the notice, on or before such day as may be so specified, a return containing such information as may reasonably be required in pursuance of the notice, and
(b) to deliver with the return such accounts, statements and documents, relating to information contained in the return, as may reasonably be so required.
​
[Notice to any partner]
(3) An officer of the Board may by notice given to any partner require the partner or a successor of his—
(a) to make and deliver to the officer in respect of such period as may be specified in the notice, on or before such day as may be so specified, a return containing such information as may reasonably be required in pursuance of the notice, and
(b) to deliver with the return such accounts and statements as may reasonably be so required;
and a notice may be given to any one partner or separate notices may be given to each partner or to such partners as the officer thinks fit." (TMA 1970, s.12AA(1) - 3))
​
"(10A) In this Act a “partnership return” means a return in pursuance of a notice under subsection (2) or (3) above." (TMA 1970, s.12AA(10A))
​
Partnership with a partner who is a partnership
​
"(1B) Where a partnership to which subsection (1) applies (“the reporting partnership”) includes a partner which is itself a partnership, references in subsections (1) and (1A) to a partner include an indirect partner in the reporting partnership.
(1C) For the purposes of this section, a person is an indirect partner in the reporting partnership if the person is a partner in—
(a) a partnership which is a partner in the reporting partnership, or
(b) any partnership which is an indirect partner in the reporting partnership by virtue of the preceding application of this subsection." (s.12AA(1B) - (1C)).
​
Partner is bare trustee: beneficiary treated as partner
​
"(10B) If—
(a) a partner in a partnership is partner as trustee for a beneficiary who is absolutely entitled to the partner's share of the profits of the partnership, and
(b) the beneficiary is chargeable to tax on those profits,
references in this Act to the partner include references to the beneficiary." (TMA 1970, s.12AA(10B))
​
Successor
​
"(11) In this Act “successor”, in relation to a person who is required to make and deliver, or has made and delivered, a partnership return, but is no longer available, means—
(a) where a partner is for the time being nominated for the purposes of this subsection by a majority of the relevant partners, that partner; and
(b) where no partner is for the time being so nominated, such partner as—
(i) in the case of a notice under subsection (2) above, is identified in accordance with rules given with that notice; or
(ii) in the case of a notice under subsection (3) above, is nominated for the purposes of this subsection by an officer of the Board;
and “predecessor” and “successor”, in relation to a person so nominated or identified, shall be construed accordingly.
(12) For the purposes of subsection (11) above a nomination under paragraph (a) of that subsection, and a revocation of such a nomination, shall not have effect in relation to any time before notice of the nomination or revocation is given to an officer of the Board.
(13) In this section “relevant partner” means a person who was a partner at any time during the period for which the return was made or is required, or the personal representatives of such a person." (TMA 1970, s.12AA(11) - (13))
​
LLP position depends on whether transparent
"[45] In relation to a limited liability partnership carrying on business with a view to profit, the application of TMA is straightforward. A return submitted under section 12AA contains the information necessary to give effect to the transparency applied to such limited liability partnerships by section 863(1). The reference in section 12AC(1) to the partner who delivered the return is treated by section 863(2)(b) as a reference to a member of the limited liability partnership. The references in section 12AC(6) to partners are similarly treated as references to members, thereby avoiding any need for separate enquiries to be opened into the members’ tax returns. If the enquiry results in amendment of the partnership return, section 28B facilitates transparency by requiring consequent amendment of the members’ tax returns.
[46] In relation to a limited liability partnership which is not carrying on business with a view to profit, the position is equally straightforward. Section 863 does not apply to it. The limited liability partnership is not treated as transparent and is liable to corporation tax on its profits, if any. TMA does not apply to it and the process for submission of a company tax return, enquiry and closure is governed by Schedule 18 to the Finance Act 1998. Income or losses are not brought into account in the members’ returns and there is no automatic need for enquiry into those returns." (HMRC v. Inverclyde Property Renovation LLP [2020] UKUT 161 (TCC), Lord Tyre and Judge Raghavan)
​
Purported partnership return treated as partnership return
​
"(1)This section applies where—
(a)a person delivers a purported partnership return (“the relevant return”) in respect of a period (“the relevant period”),
(b)the relevant return—
(i)is made on the basis that the activities of a limited liability partnership (“the LLP”) are treated, under section 863 of ITTOIA 2005 or section 1273 of CTA 2009, as carried on in partnership by its members (“the purported partnership”), and
(ii)relates to the purported partnership, but
(c)the LLP does not carry on a business with a view to profit in the relevant period (and, accordingly, its activities are not treated as mentioned in paragraph (b)(i)).
(2)For the purposes of the relevant enactments, treat the relevant return as a partnership return (and, accordingly, anything done under a relevant enactment in connection with the relevant return has the same effect as it would have if done in connection with a partnership return in a corresponding partnership case).
...
(4)In relation to the relevant return, the relevant enactments apply with the necessary modifications, including in particular the following—(a)“partner” includes purported partner, and(b)“partnership” includes the purported partnership." (TMA 1970, s.12ABZAA(1), (2), (4) - treated as always having been in force save for existing Tribunal decisions - FA 2020, s.104)
Relevant enactments
​
"(3)“Relevant enactment” means—
(a)any of the following—
(i)sections 12AC and 28B (enquiries into partnership returns),
(ii)Part 4 of FA 2014 (follower notices and accelerated payment notices), and
(b)any enactment relating to, or applying for the purposes of, an enactment within paragraph (a)." (TMA 1970, s.12ABZAA(3))
Definitions
​
(5)In this section—
“business” includes trade or profession;
“corresponding partnership case” means a corresponding case in which the limited liability partnership in question carries on a business with a view to profit in the relevant period;
“purported partner” means any person who was a member of the LLP in the relevant period;
“purported partnership return” means anything that—
(a)purports to be a partnership return, and
(b)is in a form, and is delivered in a way, that a partnership return could have been made and delivered in a corresponding partnership case.” (TMA 1970, s.12ABZAA(5))
​
Notice to deliver corporation tax return
"(1) an officer of Revenue and Customs may by notice require a company to deliver a return (a “company tax return”) of such information, accounts, statements and reports—
(a) relevant to the tax liability of the company, or
(b) otherwise relevant to the application of the Corporation Tax Acts to the company,
as may reasonably be required by the notice.
(2) Different information, accounts, statements and reports may be required from different descriptions of company." (FA 1998, Sch 18, para 3(1) - (2))
​
Relevant to the application of the Corporation Tax Acts
​
"(5) Sub-paragraph (1)(b) has effect as if the reference to the Corporation Tax Acts included a reference to sections 911, 912, 914 and 915 of the Income Tax Act 2007." (FA 1998, Sch 18, para 3(5))
​
Must specify the period to which the noice relates
​
(1) A notice requiring a company tax return must specify the period to which the notice relates." (FA 1998, Sch 18, para 5(1))
​
Withdrawal of notice to submit return
"(1) This section applies to a person who is given a notice under section 8 or 8A.
(2) Before the end of the withdrawal period, HMRC may withdraw the notice (whether at the request of the person or otherwise).
(3) But the notice may not be withdrawn if—
(a) the person has made a return under section 8 or 8A in pursuance of the notice under that section, or
(b) the person has been served with notice of a determination under section 28C by virtue of the notice under section 8 or 8A having been given to the person.
(4) If HMRC decide to withdraw the notice under section 8 or 8A they must do so by giving the person a notice under this section.
(5) A notice under this section must specify the date on which the notice under section 8 or 8A is withdrawn.
(6) For the purposes of subsection (2) “the withdrawal period” means—
(a) the period of 2 years beginning with the end of the year of assessment to which the notice under section 8 or 8A relates, or
(b) in exceptional circumstances, such extended period as HMRC may determine." (TMA 1970, s.8B(1) - (6))
​
"(1) This section applies to a partner who is required by a notice under section 12AA to deliver a return.
(2) Before the end of the withdrawal period, the partner may request HMRC to withdraw the notice.
(3) But no request may be made if the partner has delivered a return under section 12AA in pursuance of the notice.
(4) If, on receiving a request, HMRC decide to withdraw the notice under section 12AA they must do so by giving the partner a notice under this section." (TMA 1970, s.12AAA(1) - (4)).
​
Further notice may be given
​
"(7) Withdrawal of a notice given to a person under section 8 or 8A in relation to a year of assessment does not prevent HMRC from giving the person a further notice under that section in relation to that year." (TMA 1970, s.8B see also s.12AAA(7))
Cancellation of late return penalty
​
(8) See paragraph 17A of Schedule 55 to FA 2009 as to the cancellation of liability to a penalty under any paragraph of that Schedule by including provision in a notice under this section." (TMA 1970, s.8B(8))
Simple assessments: no duty to submit return
​
"(2A) A person who—
(a) falls within subsection (1A) or (1B), and
(b) is notified of a simple assessment for the year of assessment,
is not required to give notice under subsection (1) for that year unless the person is chargeable to income tax or capital gains tax for the year of assessment on any income or gain that is not included in the assessment." (TMA 1970, s.7(2A))
​
When HMRC may make a simple assessment
​
"(1) HMRC may make a simple assessment for a year of assessment in respect of a person (other than a person to whom section 28I applies) if, when the assessment is made, the person is not excluded by subsection (2) in relation to that year.
(2) Subsection (1) does not apply to a person at any time in relation to that year of assessment if—
(a) the person has delivered a return under section 8 for that year, or
(b) the person is at that time subject to a requirement to make and deliver such a return by virtue of a notice under section 8.
but nothing in this subsection prevents HMRC from giving the person notice of a simple assessment at the same time as a notice withdrawing a notice under section 8." (TMA 1970, s.28H(1) - (2))
​
What a simple assessment is
​
"(3) A simple assessment is—
(a) an assessment of the amounts in which the person is chargeable to income tax and capital gains tax for the year of assessment to which it relates, and
(b) an assessment of the amount payable by the person by way of income tax for that year, that is to say, the difference between the amount in which the person is assessed to income tax under paragraph (a) and the aggregate amount of any income tax deducted at source;
but nothing in this subsection enables an assessment to show as repayable any income tax which any provision of the Income Tax Acts provides is not repayable.
(4) The amounts in which a person is chargeable to income tax and capital gains are net amounts, taking into account any relief or allowance that is applicable."(TMA 1970, s.28H(3) - (4))
​
"(7) The tax to be assessed on a person by a simple assessment does not include any tax which—
(a) is chargeable on the scheme administrator of a registered pension scheme under Part 4 of Finance Act 2004,
(b) is chargeable on the sub-scheme administrator of a sub-scheme under Part 4 of the Finance Act 2004 as modified by the Registered Pension Schemes (Splitting of Schemes) Regulations 2006, or
(c) is chargeable on the person who is (or persons who are) the responsible person in relation to an employer-financed retirement benefits scheme under section 394(2) of ITEPA 2003." (TMA 1970, s.28H(7))
​
Must be based on information held by HMRC
​
"(5) A simple assessment must be based on information relating to the person that is held by HMRC (whether or not supplied by the person to whom the assessment relates)." (TMA 1970, s.28H(5))
​
Form and delivery of notice of assessment
​
"(6) The notice of a simple assessment required to be sent to the person by section 30A(3) must (among other things)—
(a) include particulars of the income and gains, and any relief or allowance, taken into account in the assessment, and
(b) state any amount payable by the person by virtue of section 59BA (with particulars of how it may be paid and the date by which it is payable)." (TMA 1970, s.28H(6))
​
Multiple simple assessments permitted
​
"(8) Nothing in this section prevents HMRC issuing more than one simple assessment to the same person in respect of the same year of assessment (whether or not any earlier simple assessment for that year is withdrawn)." (TMA 1970, s.28H(6))
​
Withdrawal of simple assessments
​
"(1) HMRC may withdraw a simple assessment by notice to the person to which it relates.
(2) An assessment that has been withdrawn ceases to have effect (and is to be taken as never having had any effect)." (TMA 1970, s.28J)
​
Trustee simple assessments
​