COM71141 | Enquiries: CTSA enquiries: closing an enquiry: enquiries under Schedule 1A TMA 1970 (Action Guide)

To close an enquiry under Schedule 1A into a claim or election not made in a return, consider steps 1 - 5 below. The guide is presented as follows.

Enquiry completion procedures under Schedule 1A Taxes Management Act (TMA) 1970 after Finance Act (FA) 2001

1. If you are closing an enquiry that was opened on or before 11 May 2001, write to the company to tell them about the changes to the law before you close the enquiry.

Schedule 1A enquiries, COTAX and Paragraph 24 Schedule 18 Finance Act (FA) 98 enquiries

COTAX does not provide support for Schedule 1A enquiries into claims and elections not made in a return. You must open, conduct and close those enquiries outside COTAX.

2. Do not set the ‘enquiry in progress’ signal to 'Y' in function MAPS (Maintain AP Signals).

3. If the company has delivered a return for the Accounting Period affected by the Schedule 1A claim and you are already conducting a Paragraph 24 Schedule 18 enquiry into the return:

• you must handle the Schedule 1A enquiry separately from the enquiry into the return

• you cannot record the Schedule 1A claim on COTAX while the ‘enquiry in progress’ signal is set for the Paragraph 24 Schedule 18 enquiry

• when you close your Paragraph 24 Schedule 18 enquiry, the closure notice should exclude the Schedule 1A claim as it is not a deferred amendment to the return under Paragraph 31(3) Schedule 18

• you must record the taxpayer or revenue amendment to finalise the Paragraph 24 Schedule 18 enquiry before you can update COTAX with the result of the Schedule 1A enquiry. See steps 5 and 6 below

Closing the Schedule 1A enquiry

4. Issue the closure notice for the Schedule 1A enquiry manually. Do not attempt to issue the closure notice with COTAX. Under Paragraph 7(1) Schedule 1A Taxes Management Act (TMA), your manual closure notice:

• informs the claimant that the enquiry has come to an end

• sets out your conclusions as to whether the claim should be refused or allowed in whole or part

• makes any amendment to the amount of the claim

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Processing the claim in COTAX

When you have issued the manual Schedule 1A enquiry closure notice, you need to update COTAX with the result, subject to step 3 above.

5. Use function RAMA (Record/Amend Assessment) and select ‘process a claim’ to amend the recorded claim, or record the amended claim on COTAX, suppressing the assessing output as the wording of the output issued by COTAX is not appropriate to settling a Schedule 1A enquiry.