IHTM36161 - Dealing with taxpayer's replies: general

Having started your enquiries you must continue with them until you are satisfied about the taxpayer’s innocence or negligence. You should also deal with any response you receive as soon as possible. If you fail to do this or leave your investigation in abeyance for an unreasonable time, then your ability to take up the investigation at a later time may be jeopardised. The taxpayer may be entitled to assume that you are content with the response given or construe your silence as tacit acceptance of any explanation offered.

You should take care to distinguish fact from assertion. If assertions are made, you should ensure that these are tested by, for example, calling for documentary evidence, such as attendance notes. Neither should you make assumptions (IHTM36162).

If after establishing all the facts you are unsure about or have doubts about whether or not the taxpayer has been negligent you should discuss the case with your manager, who will if necessary consult the Penalty Portfolio Holder. Our practice is always to resolve any remaining doubts we have in favour of the taxpayer.

Arguments that we have acted inconsistently (IHTM36163) or that that a penalty is not chargeable because any underpayment is met out of sums already placed on deposit (IHTM36164) should not stop you making enquiries.