DST61100 - Introduction
HMRC right to carry out a Compliance Check
DST is administered under self-assessment. In general terms, this means that a group’s self-assessment in its DST return stands and the liability is collectable without any action on HMRC’s part.
Once the return has been received, legislation gives HMRC the explicit right to enquire into it and carry out a compliance check. HMRC is under no obligation to give notice that a particular return has been ‘accepted’ or that no compliance checks will be made into that return.
The right to carry out a compliance check extends to anything contained in the return, or which is required to be contained in the return. This includes claims and elections, and also extends to any amendments to the return, see DST61200.
Revenue amendments (jeopardy amendments) during a Compliance Check
During the course of a compliance check, HMRC may make a jeopardy amendment to the group’s self-assessment if it is believed that:
- the self-assessment understates the group’s true tax liability, and
- there is likely to be a loss of tax to the Crown unless the assessment is amended at once.
The self-assessment is amended for all purposes when written notice to that effect is given to the Responsible Member. Further details about this process can be found at DST61500.
The Responsible Member can appeal against such an amendment and seek postponement of tax, but the appeal cannot be heard until the compliance check has ended. See the pages under DST68000 - Appeals for further guidance.
Concluding Compliance Checks
A compliance check is finished when a written notice of completion (closure notice) is issued to the Responsible Member, see DST61700. This notice will state the conclusions of the compliance check. The notice will conclude all elements of the compliance check and must include the amended amount of tax due if an amendment is required.
The closure notice takes effect when it is issued and amends the return to give effect to the conclusions stated in the notice.