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HMRC's power to correct personal tax return

 

"(1)     An officer of the Board may amend a return under section 8 or 8A of this Act so as to correct—

(a)     obvious errors or omissions in the return (whether errors of principle, arithmetical mistakes or otherwise), and

(b)     anything else in the return that the officer has reason to believe is incorrect in the light of information available to the officer.

(2)     A correction under this section is made by notice to the person whose return it is." (TMA 1970, s.9ZB(1) - (2))

Time limit: 9 months of delivery of return

"(3)     No such correction may be made more than nine months after—

(a)     the day on which the return was delivered, or

(b)     if the correction is required in consequence of an amendment of the return under section 9ZA of this Act, the day on which that amendment was made." (TMA 1970, s.9ZB(3))

Power is to correct obvious error and omissions

“Absent a Notice of Enquiry, the Revenue has restricted powers to amend a self-assessment, for example, only to correct obvious errors or omissions pursuant to s 9ZB(1) or s 12ABB(1).” (HMRC v. Tower MCashback LLP 1 [2010] EWCA Civ 32, §19).

Power of correction extends to errors of principle

 

“Where a taxpayer makes a claim for relief in a tax return form which is on its face relevant to the year of assessment (as, for example, when he claims employment loss relief in year 2) or where the taxpayer chooses under section 9(1) of TMA to calculate the amount of tax that he is due to pay, and allows for the relief in his calculation, the Revenue, if it disagrees, will have the option of correcting the return under section 9ZB of TMA, which extends to errors of principle. If the taxpayer rejects the correction (under section 9ZB(4)), that correction has no effect.” (HMRC v. Cotter [2013] UKSC 69, §34).
 

HMRC's power to correct personal tax return

Taxpayer's power to reject (30 days)

 

"(4)     A correction under this section is of no effect if the person whose return it is gives notice rejecting the correction.

(5)     Notice of rejection under subsection (4) above must be given—

(a)     to the officer of the Board by whom the notice of correction was given,

(b)     before the end of the period of 30 days beginning with the date of issue of the notice of correction." (TMA 1970, s.9ZB(4) - (5))

Taxpayer's power to reject (30 days)

HMRC's power to correct partnership tax return

 

"(1)     An officer of the Board may amend a partnership return so as to correct—

(a)     obvious errors or omissions in the return (whether errors of principle, arithmetical mistakes or otherwise), and

(b)     anything else in the return that the officer has reason to believe is incorrect in the light of information available to the officer.

(2)     A correction under this section is made by notice to the partner who made and delivered the return, or his successor." (TMA 1970, s.12ABB(1))

"(6)     Where a partnership return is corrected under this section, the officer shall by notice to each of the partners amend—

(a)     the partner's return under section 8 or 8A of this Act, or

(b)     the partner's company tax return,

so as to give effect to the correction of the partnership return.

Any such amendment shall cease to have effect if the correction is rejected." (TMA 1970, s.12ABB(6))

Other provisions are equivalent to correction of personal tax return.

HMRC's power to correct partnership tax return

HMRC's power to correct company tax return

 

"(1)     an officer of Revenue and Customs]may amend a company tax return so as to correct—

(a)    obvious errors or omissions in the return (whether errors of principle, arithmetical mistakes or otherwise), and

(b)     anything else in the return that the officer has reason to believe is incorrect in the light of information available to the officer.

(2)     A correction under this paragraph is made by notice to the company concerned." (FA 1998, Sch 18 para 16(1) - (2))

Time limit: 9 months

"(3)     No such correction may be made more than nine months after—

(a)     the day on which the return was delivered, or

(b)     if the correction is required in consequence of an amendment by the company under paragraph 15, the day on which that amendment was made." (FA 1998, Sch 18 para 16(3))

Taxpayer power to reject (3 months)

 

"(4)     A correction under this paragraph is of no effect if the company—

(a)     amends its return so as to reject the correction, or

(b)     after the end of the period within which it may amend its return, but within three months from the date of issue of the notice of correction, gives notice rejecting the correction.

(5)     Notice under sub-paragraph (4)(b) must be given—

(a)     in writing,

(b)     to the officer of the Board by whom notice of the correction was given." (FA 1998, Sch 18, para 16(4) - (5))

HMRC's power to correct company tax return
Taxpayer power to reject (3 months)

SDLT

SDLT

- HMRC power to correct

 

"(1)     The Inland Revenue may amend a land transaction return so as to correct obvious errors or omissions in the return (whether errors of principle, arithmetical mistakes or otherwise).

(1A)     The power under sub-paragraph (1) may, in such circumstances as the Commissioners for Her Majesty's Revenue and Customs may specify in regulations, be exercised—

(a)     in relation to England and Wales, by the Chief Land Registrar;

(b)     …

(c)     in relation to Northern Ireland, by the Registrar of Titles or the registrar of deeds;

(d)     in any case, by such other persons with functions relating to the registration of land as the regulations may specify." (FA 2003, Sch 10, para 7)

 

Time limit: 9 months

"(2)     A correction under this paragraph is made by notice to the purchaser.

(3)     No such correction may be made more than nine months after—

(a)     the day on which the return was delivered, or

(b)     if the correction is required in consequence of an amendment under paragraph 6, the day on which that amendment was made." (FA 2003, Sch 10, para 7)

- HMRC power to correct

- Taxpayer power to reject (3 months)

 

"(4)     A correction under this paragraph is of no effect if the purchaser—

(a)     amends the return so as to reject the correction, or

(b)     after the end of the period within which he may amend the return, but within three months from the date of issue of the notice of correction, gives notice rejecting the correction.

(5)     Notice under sub-paragraph (4)(b) must be given to the officer of the Board by whom notice of the correction was given." (FA 2003, Sch 10, para 7)

- Taxpayer power to reject (3 months)
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