EM3952 - Concluding the Enquiry: Non Contract Settlements: Formal Approach - Timing

The time to use formal powers is a matter of judgment and often it is sufficient to draw them to the taxpayer’s attention. When you reach the stage of considering the use of the formal powers you should review your enquiry to decide whether

• the information being called for is necessary to arrive at a reasonable appreciation of profits or to make progress
• the case is likely to be worth formal action in terms of eventual settlement
• it would be better to draw the case to a close by issuing closure notices on the basis of the information held.

In reaching your decision you should balance the effect of premature determination of assessments based on very little evidence against prolonging the investigation to obtain information which may not be significant. Your Team Leader should be involved in making this decision.

You may on occasion (depending on whether one or more SA returns are under enquiry) find that the taxpayer appeals against

• an information notice
• HMRC closure notice(s)
• refusal of a postponement application for a `jeopardy’ amendment and against the jeopardy amendment itself
• discovery assessments (and postponement applications)
• amendments under Section 30B on the partnership
• main pre-SA assessments.