If you receive a check of self assessment tax return, we suggest you begin by reading our article: Why have I been selected for tax investigation? It provides some useful background information on case selection.
Language used in a Check of self assessment Tax Return
You need to consider the language used by HMRC in any 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.” You almost feel that you have been randomly selected?
These self assessment tax return checks 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 page outlining HMRC case selection prior to a check of self assessment return for more information. Clearly, 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 of 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
Self assessment tax return – Help is available
Do not panic. Specialist help is out there. The appointment of a specialist tax investigation adviser will help ensure that any check of your self assessment tax return is completed accurately, efficiently and in full compliance with HMRC legislation. Admiral Tax promises to achieve this in the shortest possible time frame, saving you money.
We all need a friend in our corner, particularly one who can offer the following:
- A critical assessment of HMRC’s request to see documents and information
- The satisfaction that you do in fact have a case to answer. HMRC can be wrong too
- Specialist management of your tax investigation through to satisfactory closure
- A comprehensive health check of your self-assessment return and/or supporting accounts
- Recommend how we can save you some money elsewhere
- Negotiate firmly with HMRC on your behalf, within the boundaries of published legislation
- Ensure you that you achieve the best possible financial settlement via contract
- Arrange a manageable time period for you to repay any tax agreed with HMRC
- Offer you free advice on good accounting practice to avoid future problems
If you have any questions about your self assessment tax return or have received a letter from HMRC please do not hesitate to contact a qualified professional tax advisor before making contact with HMRC.