CCM12720 - Opening and Working Enquiries: Taxpayer is a Tax Credits Customer and the SA Enquiry uncovered Tax Credit Risks other than Income

SA Enquiry shows that there is nothing demonstrably wrong with the returns or accounts but the enquiry subsequently uncovers Tax Credit Risks

The Enquiry officer must tell the taxpayer that there may be Tax Credit consequences and consult with the Tax Credit Office and CCRO to discuss the materiality of the findings and risk assess the new risk. This could be via a referral.

If the Tax Credit risks are material the CCT team leader should allocate the case to a CCO

SA enquiry establishes or quantifies omissions or adjustments and Tax Credit Risks other than income uncovered during the enquiry and TCO considers these to be material.

TCO action:

  • Maintain Diary / Risk Plan/ TCW/QMS etc
  • Issue the opening letter (notice of enquiry) and the Factsheet to the customer in line with existing instructions in the Claimant Compliance Manual. If appropriate issue it with any relevant correspondence stemming from the SA enquiry, for example the Enquiry officer’s letter advising the taxpayer of the income omissions. If an agent is acting check that an appropriate mandate is in place
  • Judge what information is required for the purpose of the Tax Credit enquiry
  • If the information is not already in the Department’s possession request only information that you need.
  • Do not use either the Tax Credit informal request for information, or any subsequent formal use of information powers, to obtain information for the SA enquiry under any circumstances
  • When you obtain information for the purposes of the Tax Credit enquiry you can pass it to the SA Enquiry officer. But you must not ask for the information in the knowledge that the real reason is for purposes other than Tax Credits, e.g. for the SA enquiry
  • Attend any meetings with the taxpayer / customer, and lead on requests for information / explanations and test those explanations in respect of Tax Credits if required to do so
  • Consider whether the current year’s award needs revision for income.