»Ê¹ÚÌåÓýapp

TIOPA10/SCH7A/PARAS58, 59

Where a reporting company does not appeal a closure notice, the normal procedure would be for it complete a two-step process by filing one or more revised or new returns that comply with the requirements of the notice -TIOPA10/SCH7A/PARA50, CFM98800. In such a revised return, it has the opportunity to make discretionary allocations of disallowances to consenting companies - see CFM98580. »Ê¹ÚÌåÓýapp two-step process should allow an efficient means of settling the enquiry, allowing the reporting company to make discretionary allocations, and avoiding the need for HMRC to compute and notify pro-rata amounts.

If the reporting company fails to submit a return within the 3 months allowed by PARA50(2), an officer may make a determination under paragraph 58. A determination is made on each UK group company subject to interest restrictions. »Ê¹ÚÌåÓýapp officer is required to determine, to the best of his information and belief, pro-rata amounts of the total disallowed amount to allocate to companies and their accounting periods. Where a company is apportioned an amount (other than nil), it must leave that amount of its deduction for tax-interest out of account. For the calculation of pro-rata amounts by company and accounting period, see CFM98590 and CFM98600.

A determination may also be made under PARA58 where a return is submitted within the three month period specified in PARA 50(2), but the officer considers that the return does not comply with the requirements of the closure notice.

»Ê¹ÚÌåÓýapp officer must send notice of the determination to both the company and the group’s reporting company, and must make any determination within 3 months of the end of the “return periodâ€�, which is the 3 months after the issue of the closure notice allowed by PARA50(2).

Where a group has not submitted an interest restriction return an officer may make a determination under PARA56 with the intention of prompting the group to make a return, see CFM98560. In that case a return made within 12 months has effect (PARA57). But, where an officer makes a determination under PARA58, this is intended to achieve finality, where a group has neither appealed a closure notice nor taken the steps required by the closure notice - PARA49(2)(b). Accordingly there is no further opportunity to submit returns.

PARA59 permits an appeal to be made against a PARA 58 determination within 30 days, but the scope of such an appeal is restricted to the question of whether the determination complies with the closure notice.

Where a notice of determination is given under PARA58 a company is treated as having amended its return in accordance with the determination - PARA 70(2).

It is possible that a determination might be made under PARA56 following the closure of an enquiry, but this would be the case only where a reporting company is appointed under PARA 51 or 53. This reporting company will then have 3 months to submit a return PARA7(5)(b) (or exceptionally until 12 months after the period of account were this later). »Ê¹ÚÌåÓýapp determination would then be part of the process applicable in the absence of a return, or one that meets the requirements of PARA20, see CFM98430.