HMRC have issued an operational practice notice on how large and medium sized group companies may in certain circumstance benefit from the change to the enquiry window period rules as introduced by Finance Act 2007 on early submissions of tax returns.

Finance Act 2007 changed the rules about when HMRC can open an enquiry into individuals’ and companies’ self assessment tax returns. The general effect of the changes is that where a return is delivered early, the enquiry window will close sooner-12 months after the date of delivery, rather than 12 months after the statutory filing date. The intention of the changes is to remove a disincentive to early filing.

Companies that are members of a group which is not a ‘small group’ in Companies Act terms are excluded from the change to the enquiry window mentioned above. So by law, HMRC will still be able to open an enquiry into the company tax return of any member of a large or medium-sized group up to the anniversary of the statutory filing date, however early the return is delivered.

However, HMRC have put in place Operational Guidelines which aim to allow large and medium sized group companies to benefit from the 2007 FA enquiry window changes.

Full details on how the operational guidelines impact large and medium sized groups is available at
http://www.hmrc.gov.uk/ctsa/enq-window.htm.