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Types of HMRC enquieries

Types of HMRC enquiries

13 June 2024

HMRC can enquire into any statutory return (or amendment of that return) or statutory claim to check if the return / claim has been prepared correctly or if further information is required.

HMRC has the ability to check any statutory return or claim. They do this to ensure correct preparation or to request further information.

According to HMRC’s internal manuals, an enquiry lacks a statutory definition. It follows the dictionary meaning of ‘seeking information, asking, questioning’. The nature and extent of enquiries can vary greatly.

Historically, HMRC has used the terms ‘full enquiries’ and ‘aspect enquiries’. ‘Full enquiries’ cover a whole tax return, while ‘aspect enquiries’ deal with one or more matters. However, the legislation does not differentiate between enquiry types. So, all enquiries into tax returns are legally full return enquiries. This is true even if HMRC only needs to check part of the return in practice.

If HMRC does not make any enquiries within the allowed period, or if they complete an enquiry, the return becomes final. Exceptions to this are:

  • The taxpayer can still amend their return within time.
  • The taxpayer has carelessly or deliberately caused a loss of tax.
  • HMRC discovers that the return was incorrect, and the taxpayer did not disclose enough information to show this.

The last point is known as a discovery assessment. If HMRC makes a discovery in such circumstances, they can make a discovery assessment. This can be up to 6 years (or 20 years if the taxpayer failed to notify chargeability) after the end of the relevant accounting period.

It’s crucial for taxpayers to understand the implications of HMRC enquiries. Being aware of the enquiry process can help ensure compliance and avoid penalties. It’s also important to remember that HMRC is there to help. If taxpayers have any doubts or questions about their returns, they should not hesitate to reach out to HMRC. This proactive approach can prevent errors and facilitate a smoother enquiry process, should one occur. Remember, it’s always better to be safe than sorry when it comes to tax matters.

Source: HM Revenue & Customs Tue, 11 Jun 2024 00:00:00 +0100

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