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After an ATED return has been received HMRC may request formal advice on the valuation adopted by the taxpayer in the return (see paragraphs 12.41 – 12.50 below).
HMRC may also in some cases request informal advice on the value of a property to consider whether a taxpayer who has not submitted an ATED return should have done so (see paragraph 12.52 below).
If HMRC decide to challenge the valuation adopted by the taxpayer in their ATED return they will open an enquiry into the return and obtain full information from the taxpayer on the property valued, the interest held and a copy of any supporting professional valuation report obtained by the taxpayer. All information obtained from the taxpayer will be attached to HMRC’s request for advice.
If there is insufficient information to identify the property then HMRC should be advised as soon as possible and no further action should be taken on the request until further information is received from HMRC.
All formal requests for advice should be dealt with in accordance with paragraphs 12.42-12.50 below.
If on the basis of the available information, or after obtaining further information from the taxpayer, the caseworker is able to accept the banding put forward by the taxpayer then the case should be reported 'as returned'. The report should usually be issued to HMRC within either 20 working days of receipt of the case or receipt of any further information requested.
If the case is reported on the basis of the information included in the request the credit type will be 01, if it is necessary to obtain further information from the taxpayer then the credit type will be 02 or 03 (see paragraphs 12.43 and 12.45 below)
A letter should be sent to the taxpayer, or agent, advising that the case has been received and the name of the caseworker to whom it has been allocated in all cases not reported within 20 working days of receipt of the case.
In cases where further information is required this opening letter should include the request for the information required (see paragraph 12.44 below).
On receipt of an assurance check case, the caseworker should as soon as possible consider whether there is sufficient information available to provide advice on the relevant valuation band or whether further essential information is required. The caseworker should consider the information provided by the taxpayer and any available office records.
Where the information provided is insufficient to make a judgement on the relevant value band then the caseworker should contact the taxpayer or their agent to obtain the further information required in accordance with paragraphs 12.45-12.46 below. If it is necessary to request further information the case credit type should be amended from 01 to 02.
The caseworker should seek to obtain any further information from the taxpayer, or their agent, within 20 working days of receipt of the case. The request for information should include a date by which it is required (usually 20 working days) and also advise the taxpayer, or agent to make contact if they are unable to meet this date. It is important for caseworkers to carefully consider the further information needed to ensure that they do not request information that has already been provided.
If no reply is received to a request for information a reminder should be issued after 20 working days. The reminder should set out the information required again and advise the taxpayer that if it is not received within 20 working days the matter will be referred to the HMRC to consider seeking the outstanding information formally. If a substantive reply, or a refusal to supply the information, has not been received after a further 15 working days then the caseworker should telephone to seek an explanation for the delay. If the information is still not received by either 20 working days from the issue of the written reminder (ie. up to 60 working days from receipt of the case), or by the revised date agreed in the telephone call, HMRC should be notified so that the HMRC caseworker may consider using HMRC’s information powers (in Schedule 36, Finance Act 2008) to obtain the outstanding information. Pending receipt of the required information, the file should be reported and the taxpayer or agent should be notified of the request to HMRC to obtain the information.
The HMRC caseworker will advise SVT Hub when the required information has been obtained. When the required information is received the case should be reopened (credit type 03) and the caseworker should then proceed with the valuation and any negotiations required.
If the information is received by the VOA direct from the taxpayer, or agent, after HMRC has been asked to consider a formal request the caseworker should immediately notify the HMRC caseworker, so that any formal action may be halted. The caseworker should then arrange for the case to be reopened (credit type 03) and proceed with the valuation and any negotiations required.
If on the basis of the available information, or after obtaining further information from the taxpayer, the caseworker is unable to accept the banding put forward by the taxpayer then the property should be inspected internally (see paragraph 12.48 below). If it is necessary to inspect the property then, if it has not been done already (see paragraph 12.42 above) the case credit type should be amended from 01 to 02. If after inspection the caseworker is still unable to accept the taxpayer’s banding then the case should be progressed in accordance with paragraph 12.49 below.
Paragraph 12A of Schedule 36 of the FA 2008 (as amended by FA 2013, Schedule 34, Part 1, paragraph 2), provides that an officer of HMRC may enter and inspect premises for the purpose of valuing, measuring or determining the character of the premises or property if the valuation, measurement or determination is reasonably required for the purpose of checking any person’s position as regards ATED. A person who the officer considers is needed to assist with the valuation, measurement or determination may enter and inspect the premises or property with the officer. This statutory inspection power is subject to conditions contained in paragraph 12B. An inspection using the statutory power contained in paragraph 12A may be carried out only if either Condition A or Condition B is satisfied. Condition A provides that the inspection is carried out at a time agreed to by the relevant person, and that the relevant person has been given notice in writing of the agreed time of the inspection. Condition B provides that the inspection has been approved by the tribunal, and any relevant person specified by the tribunal has been given at least 7 days notice in writing of the time of the inspection.
In most cases it will usually be possible to arrange an inspection for valuation purposes with the taxpayer (or the current owner or occupier of a property) by agreement without resorting to formal use of the statutory powers. When arranging inspections by agreement caseworkers should always follow the advice contained in the following paragraphs and if in any case inspection is refused or frustrated caseworkers must refer details of the difficulty to SVT Policy and Professional in accordance with sub-paragraph (c) below. Procedures for approving the issuing of notices to exercise the statutory powers and references to the tribunal for approval to meet the requirements of Conditions A and B above have been agreed with HMRC and SVT Policy and Professional will advise the caseworker on the appropriate action to be taken.
Caseworkers should always give prior notice of a proposed inspection and, if possible, confirm any verbal arrangements in writing before an inspection is undertaken. For tax confidentiality reasons the particular purpose of the inspection must not be disclosed to anyone other than the taxpayer or their agents. If some limited disclosure to anyone else is considered necessary the use of the phrase "for tax purposes" is appropriate. If a caseworker is confronted with a situation where only a minor (child) is present on the premises, under no circumstances should any inspection of the property be made either internally or externally. This also extends to the taking of, or checking of external dimensions. On returning to the office, the caseworker should send a letter to the occupier explaining the circumstances and, an appointment should be made with a request that an adult will be present on the next occasion. In all cases the caseworker should produce an authority to inspect.
If after attempting to arrange an inspection by agreement facilities to inspect are refused or frustrated the facts should be reported to SVT Policy and Professional within 5 working days of the refusal or the second failed appointment. The report to SVT Policy & Professional should give an estimate of the valuation required, based on an inspection without entry on to the property. HMRC should be advised, by either telephone or email, of the action taken. SVT Policy and Professional will then advise the caseworker how to proceed.
Where, following inspection the caseworker, is unable to accept the value returned the taxpayer should be advised of the caseworker's opinion of value either within 30 working days of receipt of the case or 20 working days of the receipt of any further information or inspection. If no response is received from the taxpayer or agent reminders should be issued to the taxpayer/agent at 20 working day intervals.
Every effort should be made to conclude negotiations and report the case as soon as possible, the aim being to report all cases within an average of 100 working days.
If negotiations reach deadlock or the other side are not responding then an ‘unagreed’ report should be issued as soon as possible in accordance with the procedures in Part 5 of this Section and the case file closed. The case may be re-opened if it is referred back for further negotiations after HMRC have contacted the taxpayer.
The caseworker should normally issue a progress report to HMRC at 13 weeks from receipt of the case. Detailed progress reports should be issued in all cases not reported after 100 working days , detailing the state of the negotiations and the values contended for by the VOA and the parties, and at two monthly intervals thereafter until the case is reported.
Cases should be reported to HMRC endorsed either ‘as returned’, ‘agreed’ or ‘unagreed’ (see Part 5 below) as appropriate.
Reports should normally be sent to HMRC by gsi e-mail (see paragraph 12.25 above).
If HMRC are requesting informal advice on the value of a property to consider whether a taxpayer who has not submitted a return should have done so, then the request will be clearly marked as a request for informal advice.
In such cases the information available to HMRC may be limited - but whatever information is available will be detailed in HMRC’s request. Every effort should therefore be made to provide advice based on the available information and making any reasonable assumptions.
HMRC will in their request make it clear that only not negotiated advice is required and that there must be no contact with the taxpayer. If any further essential information is required before a valuation can be provided in such a case then HMRC should be advised accordingly.
All requests for informal advice should be registered on CRAC as credit type 01 (see paragraph 12.21 above).
It is for HMRC to decide if a taxpayer qualifies for any of the reliefs from ATED (see paragraph 12.12 above). If a taxpayer raises any queries about the availability of a relief they should be advised to contact HMRC.