EM7564 - Partnerships: enquiries: concluding an enquiry - consequential amendments to partners returns

TMA70/s.28B(4)
TMA70/30B(2)

If the partnership return has been amended (either by a partial or final closure notice, or by a discovery amendment) you must also amend the partners personal returns to give effect to the amendments made to the partnership return. This amendment is often called a ‘consequential amendment’.

The timing of the consequential amendment

The timing of the consequential amendments is something that needs to be considered.

A consequential amendment can be made to the partners returns at any point after the partnership return is amended, and there may be instances where it is appropriate to issue the consequential amendments shortly after the notice has been issued or before the partnership position has become final.

It would normally however be advisable to delay making the consequential amendments until the partnership return has become final. This would usually be when the partnership partial or final closure notice has not been appealed, or when any appeal has been finally determined by the tribunal or settled by agreement.

Once the partnership return has become final, consequential amendments must be made without delay. This ensures a consistent link between the figures in the partnership return as amended and the figures in the partner’s individual returns.

If a late appeal is made by the nominated partner and accepted, it is likely that consequential amendments have already been made. These consequential amendments cannot be undone. The consequential amendments will have given effect to the position shown in the partnership return, reflecting the statutory position. In these cases, you can informally stand over collection of the additional tax and NIC brought into charge on each of the partner’s self assessments so far as it is in dispute, pending determination of the appeal.

The content of a consequential amendment

You must issue the relevant notice, which is available in SEEs. You should also include a computation to show how the amendment has been arrived at.

It’s important to note that, under statute, it’s the consequential amendment notice itself that amends the return. That is why the notices are written in the past tense, as the amendment is made when the notice is issued.

Consequential claims

The partner may wish to make or amend one of more claims or elections as a result of the consequential amendment. Subject to the normal rules and time limits applying to each claim or election, you may be able to give effect to them either at the same time as making the amendment, or afterwards. Whatever course you take you should ensure that you make clear to the partner what amendments you are making to their self-assessment and why. 

Rights of appeal

Partners have no statutory right of appeal against consequential amendments.

A partner may object to the amendment on the grounds that it is incorrect because of a mistake in your computation. If you have made a mistake in your computation, then you should put it right.

If you cannot agree the computational effect of the consequential amendment with the partner or their agent, then a submission should be made to the technical specialists in BAI.

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