Check of self assessment tax return news.
You may well have noted that there has been a recent hold placed upon HMRC’s tax investigation work due to the Covid-19 pandemic. This hold has now been removed with HMRC’s compliance engine now fully back up to speed. There will inevitably be an intensification in the departments compliance work The UK faces an almost unprecedented level of debt due to Covid. It makes sense then that the government is going to have to finance that debt. Tax investigation work is going to be very much at the sharp end of that financing. There has never been a better time to bring your tax affairs up to date.
The language used in a Check of self assessment Tax Return
You need to consider the language used by HMRC in any compliance check of self assessment tax return very carefully. Do not be fooled by what can appear, at first glance, to be a very friendly customer service enquiry.
HMRC begin by saying – “Every year we check a number of returns to make sure they are correct and that our customers are paying the right amount of tax.” Do you almost feel that you have been randomly selected?
The check of self-assessment tax returns are rarely a random affair. Random checks account for a tiny percentage of the overall number of compliance checks started by HMRC each year. The reality is that over 90% of HMRC checks are launched following a thorough risk assessment.
NEW APPROACH, SAME OBJECTIVE
Section 9A TMA 1970 is precisely the same tax investigation legislation applied by HMRC prior to launching this latest compliance check initiative. However friendly the language may appear to be in a check of self-assessment return, you should, without question, consider yourself under tax investigation with all of the associated implications.
If you have received a letter from HMRC informing you that a check of self assessment tax return has commenced, the Inspector clearly feels that tax is at risk. In short, HMRC feels that tax has been underpaid. They are looking to recover it for the year of investigation and if applicable for earlier years too.
HMRC’s action will be determined by the nature and scale of the tax underpaid. If HMRC decides that your conduct during the year of investigation applies to earlier years – and the tax loss is significant, they will look to scale the irregularities back. You can be sure that HMRC will not write to you and commence this process without first doing their research. They will have compiled a comprehensive intelligence file, including information from third parties.
Visit our FAQ page for more information on HMRC case selection prior to a check of the self-assessment tax return. HMRC makes mistakes in just the same way that we all do. They could be wrong!! That does not mean that you are not compelled to provide them with all relevant information and documents as required by them.
We have written an article covering requests for information and documents during an HMRC compliance check.
CHECK OF SELF ASSESSMENT PARTNERSHIP TAX RETURN SECTION 12A TMA 1970
If you receive a check for a self assessment partnership tax return, you may wish to begin by reading our article “Why have I been selected for tax investigation?” before continuing. It provides some useful background information on HMRC case selection, prior to beginning a check of your self-assessment tax return. A check of self-assessment partnership tax return issued under Section 12A TMA 1970 focuses on a partnership. The notice itself will generally be issued to the nominated partner.
CUT THROUGH THE JARGON
As with any compliance check issued by HMRC, you need to consider the language used very carefully. If you have received a letter from HMRC informing you that a check of self assessment partnership tax return has commenced, the Inspector clearly feels that tax is at risk. In short, HMRC feels that tax has been underpaid. They are looking to recover it for the year of investigation and if applicable for earlier years too. Without question, a check of self-assessment partnership tax return is simply a tax investigation by another name.
If HMRC decides that your conduct during the year of investigation applies to earlier years and the tax loss is significant, they will look to scale the irregularities back. In such circumstances, the tax investigation will generally be settled via a contract arrangement. HMRC refer to such an agreement as a contract settlement. You can be sure that HMRC will not write to you without first doing their research. They will have compiled a comprehensive intelligence file, including information from third parties. You may wish to have a look through HMRC notes on self-assessment
Now that you have read the background material relative to an HMRC check of self assessment tax return, please take some time to read through the quick frequently asked questions guide. However, please always remember that the best way to get the clear no-nonsense advice you need is to pick up the telephone and speak to us. Please do give us a call for a friendly, no judgement chat regarding your check of self assessment tax return.