House of Commons portcullis
House of Commons
Session 2013 - 14
Internet Publications
Other Bills before Parliament

Finance Bill


Finance Bill
Schedule 31 — Annual tax on enveloped dwellings: returns, enquiries, assessments and appeals
Part 1 — Returns

397

 

Schedule 31

Section 160

 

Annual tax on enveloped dwellings: returns, enquiries, assessments and

appeals

Part 1

Returns

5

Contents of return

1     (1)  

The Commissioners for Her Majesty’s Revenue and Customs may by

regulations make provision about—

(a)   

the form and content of a return;

(b)   

the method of delivering a return.

10

      (2)  

Regulations under sub-paragraph (1) may make different provision for

different purposes.

      (3)  

Every return must include a declaration by the person making it to the effect

that the return is correct and complete to the best of the person’s knowledge.

      (4)  

A return is treated as containing any information provided by the person

15

making the return for the purpose of completing the return.

2          

In this Part of this Act—

(a)   

references to the delivery of an annual tax on enveloped dwellings

return are to the delivery of a return that complies with all

requirements imposed by or under any of sections 157 and 159 and

20

paragraph 1;

(b)   

references to the delivery of a return of the adjusted chargeable

amount are to the delivery of a return that complies with all

requirements imposed by or under any of sections 158 and 159 and

paragraph 1.

25

Amendment of return by chargeable person

3     (1)  

A person who has delivered a return may amend the return by notice to an

officer of Revenue and Customs.

      (2)  

The Commissioners for Her Majesty’s Revenue and Customs may require

that notices under this paragraph—

30

(a)   

are in a specified form, or

(b)   

contain specified information.

      (3)  

An amendment under this paragraph must be made by the end of the next

chargeable period after the chargeable period to which the return relates

(but see the exception that follows).

35

      (4)  

If a return is delivered on or after 1 January in the chargeable period next

after that to which it relates, the latest time for amending the return under

this paragraph is the end of the period of 3 months after the day on which

the return is delivered.

 
 

Finance Bill
Schedule 31 — Annual tax on enveloped dwellings: returns, enquiries, assessments and appeals
Part 2 — Duty to keep and preserve records

398

 

Correction of return by HMRC

4     (1)  

An officer of Revenue and Customs may correct any obvious error or

omission in a return.

      (2)  

A correction under this paragraph—

(a)   

is made by notice to the chargeable person, and

5

(b)   

is regarded as effecting an amendment of the return.

      (3)  

The reference in sub-paragraph (1) to an error includes, for instance, an

arithmetical mistake or an error of principle.

      (4)  

A correction under this paragraph must be made within the 9 months

beginning with—

10

(a)   

the day on which the return was delivered, or

(b)   

if the correction is needed as a result of an amendment under

paragraph 3, the day on which the amendment was made.

      (5)  

A correction under this paragraph has no effect if the chargeable person—

(a)   

amends the return so as to reject the correction, or

15

(b)   

gives a notice rejecting the correction in the special period mentioned

in sub-paragraph (6).

      (6)  

A notice is given in the “special period” if it is given—

(a)   

after the end of the period within which the chargeable person may

amend the return, but

20

(b)   

before the end of the 3 months beginning with the date of issue of the

notice of correction.

      (7)  

A notice under sub-paragraph (5)(b) must be given to HMRC.

Part 2

Duty to keep and preserve records

25

Duty to keep and preserve records

5     (1)  

A person who is required to deliver a return for a chargeable period must—

(a)   

keep any records that may be needed to enable the person to deliver

a correct and complete return, and

(b)   

preserve those records in accordance with this paragraph.

30

      (2)  

The records must be preserved until the end of the later of the relevant day

and the date on which—

(a)   

an enquiry into the return is completed, or

(b)   

if there is no enquiry, an officer of Revenue and Customs no longer

has power to enquire into the return.

35

      (3)  

“The relevant day” means—

(a)   

the sixth anniversary of the last day of the chargeable period, or

(b)   

any earlier day that may be specified in writing by the

Commissioners for Her Majesty’s Revenue and Customs.

      (4)  

Different days may be specified for different purposes under sub-paragraph

40

(3)(b).

 
 

Finance Bill
Schedule 31 — Annual tax on enveloped dwellings: returns, enquiries, assessments and appeals
Part 3 — Enquiry into return

399

 

      (5)  

The records required to be kept and preserved under this paragraph

include—

(a)   

details of any relevant transaction (including any contract or

conveyance and any supporting maps, plans or similar documents

and records of relevant payments, receipts and financial

5

arrangements);

(b)   

records of any valuation of the single-dwelling interest relevant to its

value on any day in the chargeable period.

      (6)  

The Commissioners for Her Majesty’s Revenue and Customs may by

regulations—

10

(a)   

provide that the records required to be kept under this paragraph do,

or do not, include records specified in the regulations;

(b)   

specify supporting documents that are required to be kept under this

paragraph.

      (7)  

Regulations under this paragraph may make provision by reference to

15

things specified in a notice published by the Commissioners for Her

Majesty’s Revenue and Customs in accordance with the regulations (and not

withdrawn by a subsequent notice).

      (8)  

“Supporting documents” includes accounts, books, deeds, contracts,

vouchers and receipts.

20

Preservation of information etc

6          

The duty under paragraph 5 to preserve records may be satisfied—

(a)   

by preserving them in any form and by any means, or

(b)   

by preserving the information contained in them in any form and by

any means, subject to any conditions or exceptions specified in

25

writing by the Commissioners for Her Majesty’s Revenue and

Customs.

Penalty for failure to keep and preserve records

7     (1)  

A person who fails to comply with paragraph 5 in relation to a chargeable

period is liable to a penalty not exceeding £3,000, subject to the following

30

exception.

      (2)  

No penalty is incurred if an officer of Revenue and Customs is satisfied that

any facts that it is reasonable to require should be proved to HMRC, and that

would have been proved by the records, are proved by other documentary

evidence provided to them.

35

Part 3

Enquiry into return

Notice of enquiry

8     (1)  

An officer of Revenue and Customs may enquire into a return if sub-

paragraph (2) has been complied with.

40

      (2)  

Notice of the intention to make an enquiry must be given—

(a)   

to the person by whom or on whose behalf the return was delivered

(“the relevant person”);

 
 

Finance Bill
Schedule 31 — Annual tax on enveloped dwellings: returns, enquiries, assessments and appeals
Part 3 — Enquiry into return

400

 

(b)   

before the end of the period of 12 months after the relevant date.

      (3)  

The relevant date is—

(a)   

the filing date, if the return was delivered on or before that date;

(b)   

the date on which the return was delivered, if the return was

delivered after the filing date;

5

(c)   

the date on which the amendment was made, if the return is

amended under paragraph 3 (amendment by person making the

return).

      (4)  

A return that has been the subject of one notice under this paragraph may

not be the subject of another, except a notice given in consequence of an

10

amendment (or another amendment) of the return under paragraph 3.

      (5)  

A notice under this paragraph is referred to as a “notice of enquiry”.

Scope of enquiry

9     (1)  

An enquiry extends to anything contained in the return, or required to be

contained in the return, that relates—

15

(a)   

to the question whether the relevant person is chargeable to tax with

respect to the interest to which the return relates for the chargeable

period concerned, or

(b)   

to the amount of tax chargeable on the relevant person with respect

to that interest for that period.

20

      (2)  

Sub-paragraph (3) applies if the notice of enquiry is given as a result of the

amendment of a return under paragraph 3 (amendment by person making

the return)—

(a)   

at a time when it is no longer possible to give a notice of enquiry

under paragraph 8(3)(a) or (b), or

25

(b)   

after an enquiry into the return has been completed.

      (3)  

The enquiry is limited to—

(a)   

matters to which the amendment relates, and

(b)   

matters affected by the amendment.

Amendment of self assessment during enquiry to prevent loss of tax

30

10    (1)  

If at a time when an enquiry is in progress into a return an officer of Revenue

and Customs forms the opinion—

(a)   

that the amount stated in the self assessment contained in the return

as the amount of tax payable is insufficient, and

(b)   

that unless the assessment is immediately amended there is likely to

35

be a loss of tax to the Crown,

           

the officer may by notice in writing to the relevant person amend the

assessment to make good the deficiency.

      (2)  

If the enquiry is one that is limited by paragraph 9(2) and (3) to matters

arising from an amendment of the return, sub-paragraph (1) above applies

40

only so far as the deficiency is attributable to the amendment.

      (3)  

For the purposes of this paragraph the period during which an enquiry is in

progress is the whole of the period—

(a)   

beginning with the day on which the notice of enquiry is given, and

 
 

Finance Bill
Schedule 31 — Annual tax on enveloped dwellings: returns, enquiries, assessments and appeals
Part 3 — Enquiry into return

401

 

(b)   

ending with the day on which the enquiry is completed.

Referral of questions to tribunal during enquiry

11    (1)  

At any time when an enquiry is in progress into a return any question arising

in connection with the subject-matter of the return may be referred to the

tribunal for determination.

5

      (2)  

Notice of the referral must be given to the tribunal jointly by the relevant

person and an officer of Revenue and Customs.

      (3)  

More than one notice of referral may be given under this paragraph in

relation to an enquiry.

      (4)  

For the purposes of this paragraph the period during which an enquiry is in

10

progress is the whole of the period—

(a)   

beginning with the day on which the notice of enquiry is given, and

(b)   

ending with the day on which the enquiry is completed.

Withdrawal of notice of referral

12         

An officer of Revenue and Customs or the relevant person may withdraw a

15

notice of referral under paragraph 11.

Effect of referral on enquiry

13    (1)  

While proceedings on a referral under paragraph 11 are in progress in

relation to an enquiry—

(a)   

no closure notice may be given in relation to the enquiry, and

20

(b)   

no application may be made for a direction to give a closure notice.

      (2)  

Proceedings on a referral are “in progress” where—

(a)   

notice of referral has been given and has not been withdrawn, and

(b)   

the questions referred have not been finally determined.

      (3)  

A question referred has been “finally determined” when—

25

(a)   

it has been determined by the tribunal, and

(b)   

there is no further possibility of the determination being varied or set

aside (disregarding any power to grant permission to appeal out of

time).

Effect of determination

30

14    (1)  

A determination under paragraph 11 is binding on the parties to the referral

in the same way, and to the same extent, as a decision on a preliminary issue

in an appeal.

      (2)  

The officer of Revenue and Customs conducting the enquiry must take the

determination into account—

35

(a)   

in reaching conclusions on the enquiry, and

(b)   

in the formulation of any amendments of the return that may be

required to give effect to those conclusions.

      (3)  

The question determined may not be reopened on an appeal, except to the

extent that it could be reopened if it had been determined as a preliminary

40

issue in that appeal.

 
 

Finance Bill
Schedule 31 — Annual tax on enveloped dwellings: returns, enquiries, assessments and appeals
Part 4 — HMRC determination where no return delivered

402

 

Tribunal to which referrals are made

15    (1)  

Where the question to be referred under paragraph 11 is of the market value

of any single-dwelling interest, the referral is to be made to—

(a)   

the Upper Tribunal, if the land is in England and Wales;

(b)   

the Lands Tribunal for Scotland, if the land is in Scotland;

5

(c)   

the Lands Tribunal for Northern Ireland, if the land is in Northern

Ireland.

      (2)  

In any other case a referral under paragraph 11 is to be made to—

(a)   

the First-tier Tribunal, or

(b)   

where determined by or under Tribunal Procedure Rules, the Upper

10

Tribunal.

      (3)  

References to “the tribunal” in paragraphs 11 and 13 are to be read

accordingly.

Completion of enquiry

16    (1)  

An enquiry under paragraph 8 is completed when an officer of Revenue and

15

Customs informs the relevant person by a notice (a “closure notice”) that the

enquiry is complete and states the conclusions reached in the enquiry.

      (2)  

A closure notice must either—

(a)   

state that in the officer’s opinion no amendment of the return is

required, or

20

(b)   

make the amendments of the return required to give effect to the

officer’s conclusions.

      (3)  

A closure notice takes effect when it is issued.

Direction to complete enquiry

17    (1)  

The relevant person may apply to the tribunal for a direction that a closure

25

notice is to be given within a specified period.

      (2)  

The tribunal hearing the application must give a direction unless satisfied

that HMRC have reasonable grounds for not giving a closure notice within

that period.

      (3)  

In this paragraph “the tribunal” means—

30

(a)   

the First-tier Tribunal, or

(b)   

where determined by or under Tribunal Procedure Rules, the Upper

Tribunal.

Part 4

HMRC determination where no return delivered

35

Determination of tax chargeable if no return delivered

18    (1)  

This paragraph applies where condition A or condition B is met.

      (2)  

Condition A is that—

 
 

Finance Bill
Schedule 31 — Annual tax on enveloped dwellings: returns, enquiries, assessments and appeals
Part 4 — HMRC determination where no return delivered

403

 

(a)   

an officer of Revenue and Customs has reason to believe that a

person (“P”) is chargeable to tax for a chargeable period in respect of

a single-dwelling interest,

(b)   

P has not made an annual tax on enveloped dwellings return for the

period in respect of the interest, and

5

(c)   

the relevant filing date has passed.

      (3)  

Condition B is that—

(a)   

an officer of Revenue and Customs has reason to believe that

additional tax is payable by a person (“P”) under section 161(2) for a

chargeable period in respect of a single-dwelling interest,

10

(b)   

P has not made a return of the adjusted chargeable amount for the

period in respect of the interest, and

(c)   

the relevant filing date has passed.

      (4)  

“The relevant filing date” means the date by which the officer believes a

return was required to be delivered.

15

      (5)  

The officer may make a determination (an “HMRC determination”) to the

best of the officer’s information and belief of the amount of tax to which P is

chargeable for the period concerned with respect to the interest.

      (6)  

Notice of the determination must be given to P and must state the date on

which it is issued.

20

      (7)  

No HMRC determination may be made more than 4 years after the end of

the chargeable period to which it relates.

Determination to have effect as a self assessment

19    (1)  

A determination under paragraph 18 has effect for enforcement purposes as

if it were a self assessment made by P.

25

      (2)  

In sub-paragraph (1) “for enforcement purposes” means for the purposes of

section 163 and Schedule 12 to FA 2003 (collection and recovery of tax etc).

      (3)  

Nothing in this paragraph affects any liability of a person to a penalty for

failure to deliver a return.

Determination superseded by actual self assessment

30

20    (1)  

If after an HMRC determination has been made P delivers a return for the

chargeable period with respect to the interest in question, the self assessment

included in that return supersedes the determination.

      (2)  

Sub-paragraph (1) does not apply to a return delivered—

(a)   

more than 4 years after the power to make the determination first

35

became exercisable, or

(b)   

more than 12 months after the date of the determination,

           

whichever is the later.

      (3)  

Where—

(a)   

proceedings have been begun for the recovery of any tax charged by

40

an HMRC determination, and

(b)   

before the proceedings are concluded the determination is

superseded by a self assessment,

 
 

 
previous section contents continue
 
House of Commons home page Houses of Parliament home page House of Lords home page search page enquiries

© Parliamentary copyright 2013
Revised 25 June 2013