Faster working initiative

Faster working initiative

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A year or few back, the top bigwigs at the Inland Revenue introduced "Faster Working Pracice" as a means of accelerating the progression of enquiries. This was supposed to be a two-way process, ie faster working on both sides of the fence. At local tax office level this initiative was received with dismay, as accountants appeared generally more capable of adhering to the schedule than the Inland Revenue, which placed them in a poor negotiating position. I gather that the practice has since been dropped entirely.

Instead, what we have now is a habitual addendum to each letter from the Inland Revenue stating a date by which they expect a response to THEIR correspondence. Although there is no statutory foundation for this deadline, any breach appears automatically to trigger a formal notice under their information-gathering powers, ie (for companies) Para 27 Sch 18 FA 1988. Doubtless this practice is designed to provide evidence suggesting limited cooperation in the negotiation of penalty mitigation on a subsequent settlement.

This seems to be rather a one-way alternative to the faster working practice initiative. My suggested solution, which may have some effect if popularly adopted by others, is to specify a required response date in all correspondence TO the Inland Revenue (where a response is required). If that "deadline" is breached it should (in the case of an enquiry) automatically trigger an application to the Commissioners for closure of the enquiry under (eg, for individuals) S.28A(4) TMA 1970.

Perhaps other practicioners are already using this approach? I predict a deterioration in relations with local tax offices.

Clint Westwood

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By John Savage
05th Aug 2005 09:25

Hearings set too far ahead
A couple of years ago one of my clients was under 'enquiry' (I wish the Revenue would call a spade a spade - it was a full blown 18 month tax investigation, resulting in nothing found!!). They did precisely this, every (sporadic)letter I received on behalf of my client ended in "reply within 30 days or else". In contrast, the officer took weeks to reply to any of mine.

I took the tactic you suggested, if I did not hear back from the Revenue within 30 days I applied to have the enquiry shut down, and once I did not hear anything, I applied. This happened three times, once with success, the Revenue were told to shut it down. Trouble was, by this time, the following tax year was under enquiry.

The problem I found was that when I applied directly to the clerk for the G/C's for a hearing, one was set, but it was something like 2-3 months ahead, scheduled for the next sitting of the G/C's. It seems that now with self-assessmenet, the G/C's are not having that number of hearings, such as they did under the old tax system.

And, of course, the officer knew this, and, I believe, use that knowledge.

The most effective way I have found to deal with an enquiry, and which is now the policy in my own small practice (therefore the Revenue cannot assume any one client has something to hide) is to produce all books and records for their inspection at my premises, no interviews with clients unless the client (on my advice) feels it will be beneficial to him/her, and all queries to be in correspondence. That way, one of the fastest enquiries I experienced lasted two hours!! Revenue staff just hate getting off their backsides and going out to actually meet people.

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