EM1905 - Working the Enquiry: extending the scope of the enquiry

If we make a decision to extend the scope of an enquiry to examine other matters or to check the full return, you should update caseflow, see COG14600, and any enquiry plan.

Please note that legally an enquiry covers the full return so if you think it is necessary during an enquiry to examine other matters, or the full return, this is allowed by statute.

It is not possible to lay down hard and fast rules for every possible situation in which you should extend the scope of an enquiry. You should consider whether to extend your enquiries where something has come to light which raises questions about the reliability of the rest of the return.

For example, your exploration of the facts underlying a computation may lead you to conclude that the taxpayer deliberately mis-stated the position or even tried to conceal those facts. You will need to assess the degree of mis-statement involved and decide whether the whole return is likely to be fundamentally flawed or it is confined to individual matters. If you conclude that the accuracy of the whole return is open to doubt you should extend the scope of your enquiry.

As your opening letter in the enquiry would have indicated that we would look at certain matters, you should tell the taxpayer that you are now widening your enquiries and what you now intend to cover.

Reasons for extending enquiries

The initial section 9A notice covers all matters in the return that are being enquired into, whatever their nature or scope. Taxpayers and their agents, when faced with the extension of an enquiry may question the reasons behind your decision. You should explain to the taxpayer and agent what information has led to your decision to extend the scope of your enquiry. Apart from explaining why you did not take up these matters earlier, you do not need to justify your wider enquiries.

You should continue your enquiry by requesting all the information that you now consider is necessary to check the return.

If the taxpayer does not agree they will normally have the right of appeal against any information notice you issue to obtain this information under Schedule 36 Finance Act 2008, see CH24300.

Where disputes do arise about extending the scope of your enquiry or your request for information, you should consider whether Alternative Dispute Resolution (ADR) may help you and the taxpayer resolve these. See the ADR web pages for guidance about ADR.

If the taxpayer does not agree with the outcome of ADR, they still have the right to appeal. In any proceedings before the tribunal, they will be able to advance the argument that the information you have specified is not reasonably required for the purpose of checking their tax position because you have already obtained all the relevant information. Alternatively, they will be able to ask the tribunal to direct that the enquiry should be brought to a conclusion EM1975+.