Is your HMRC enquiry in time?

The issue

HMRC have had a lot on their plate recently with all the coronavirus support initiatives and this may have meant that other things have slipped down their agenda. Despite coronavirus, there is still no latitude allowed for HMRC to miss normal deadlines which are set down in legislation. Tax payers should therefore continue to check that HMRC are following correct protocols.

HMRC can by law start an enquiry into an individual’s tax return any time within a year from the date that the return was submitted (which is easy to determine for online submissions) provided that it is submitted by the deadline which is 31 January following the 5 April end of the tax year.

If a return is submitted late (after 31 January) then the deadline is extended to the next quarter-end day following the first anniversary of the day HMRC received it. Here the quarter days are 30 April, 31 July and 31 October. For example if a person’s 2018/2019 tax return was submitted on 5 February 2020 then HMRC have until 30 April 2021 to enquire into it.

Importantly, if HMRC’s enquiry notice is dated before the enquiry deadline but you do not receive it until after the deadline then the notice is not valid.

Dealing with late enquiry notices

Anybody receiving a late notice should act quickly. This should involve the following measures:

1. Call HMRC to explain that enquiry has been received late and make a note of the call.
2. Send a letter confirming the details of the telephone call.
3. Keep the envelope with the postal mark and possibly send a copy of it along with the letter.

Evidence is key and will hopefully lead to acceptance from HMRC that the enquiry should not proceed.

Amended returns

Although the deadlines of amended returns follow the normal return rules, here only the subject of the amendment can be enquired into during the period that the original deadline has been extended by. This means that many enquiries into amended returns could be out of time to the extent that they relate to subject matter included in the original returns.

Forbes Dawson comment

Although these are fairly basic points they are important ones and can avoid the need to engage in a costly and time-consuming enquiry. More generally this is a timely reminder that HMRC do have a framework that they need to follow to effectively enquire into a return. Just as a taxpayer faces sanctions for return inaccuracies or lateness so HMRC needs to follow protocol to effectively launch an enquiry. The taxpayer recently won an SDLT case (Troy Homes) on the basis that HMRC’s enquiry notices were not received by the tax payer. The first stage in responding to any enquiry should undoubtedly be to determine that it was properly made in the first place.




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