EM7558 - Partnerships: enquiries: jeopardy amendments

Because a partnership does not have a tax liability there is no specific partnership legislation providing for a jeopardy amendment to be made to the partnership return.   

It may be possible to make a jeopardy amendment to the partners personal return as a result of the ongoing enquiries into their returns under s.9A. The jeopardy amendment is made by giving the partner a notice amending their personal return and self-assessment to include the additional tax liability that flows to them from the potential amendments to the partners returns. The guidance at EM1950 should be considered.

The decision to make a jeopardy amendment must be based on a review of each partner separately. A blanket approach across the partnership is not allowed by the legislation.

If you have established omissions/understatements in either the partnership return, or a partner’s personal return, and that partner will not agree to make a payment on account and you consider that tax is at risk, a jeopardy amendment may be appropriate in respect of that partner. Your amendment must reflect your view of the tax at risk for that partner alone, in respect of that year alone.

It follows that there may be situations where you will make a jeopardy amendment on one, or some partners, but not on others.

You will only be able to make jeopardy amendments to the partners return if you have given separate notice of intention to enquire into the partners return under s.9A.

You should avoid opening separate enquiries into a partners return solely for the purpose of making a jeopardy amendment. The taxpayer will have grounds to apply to the tribunal for a direction that you should issue full closure notice. The tribunal will direct you to complete the enquiry unless you can show reasonable grounds for continuing a separate enquiry into non-partnership aspects of the partner's return.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

<p>Although you will normally conclude enquiries into the partnership and its partners at the same time, that will not always be the case. You should bear in mind that the hearing of an appeal against a jeopardy amendment made on a partner will be dependent on the date on which you issue either a partial or final closure notice, see EM3867. The enquiry into the partnership is irrelevant for the purposes of determining the time at which any such appeal can be heard.</p>