Self assessment check by HMRC

Self assessment check by HMRC

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Hi,

I know that the answer to this my be like a piece of string, however, I will ask anyway!

What percentage of your self assessment clients, if any, have full checks of their return by HMRC?

We have a new client whose full return was completed by their previous agent and being checked, and HMRC have said this is just a standard 'chance' review.

This is my first full review since running my own business, which is just over 7 years, and not particularly concerned. I have taken on a client previously under inspection and dealt with this successfully.

However, today I have received another letter regarding a client whom we have had for 2 years, again a full review. However, when I called HMRC to organise a meeting, the person said he would not give out ay information as to why they were checking this return.

Maybe just bad luck, but a bit concerned, so would welcome you thoughts and experiences.

Replies (14)

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By Tim Vane
09th Feb 2015 12:53

In the words of Ian Fleming's Goldfinger:

'Once is happenstance. Twice is coincidence. The third time it's enemy action'

So don't fret until it happens again.

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RLI
By lionofludesch
09th Feb 2015 13:03

Very few full checks.

Strangely, I've had a client who has had two checks.  No adjustment to profits either time.

Then another who had a check as a sole trader then another after he had incorporated. No adjustment to profits either time.

Next week, I'm going to a payroll check.  The last payroll check I had was about six years ago for the same client.  Nothing found.  I'm expecting the same again.

I just wonder why HMRC bang their heads against brick walls.

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ghm
By TaxTeddy
09th Feb 2015 13:46

Hard to fathom HMRC

Tricky one to call as I can't see any patterns. We get a sprinkling of apect enquiries of course - all understandable : rendundancy settlements and the like.

We had a few of the 'are you sure your return is correct?' informal letters to clients - but no follow up.

We have one client who has had 3 aspect enquiries in 5 years - all settled as nil adjustments. But as he is a politician, it may be a profiling thing.

But full enquires actually very rare - I can only recall one in the last 6 years. 

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By murphy1
09th Feb 2015 18:04

Thanks....after three conversations with the client, they have decided to tell me that they have not declared all their income.....!

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ghm
By TaxTeddy
09th Feb 2015 18:17

Ahhh.....

Bet they don't have fee protection insurance.

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By murphy1
09th Feb 2015 18:22

Nope...they don't!

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Replying to geoffmw1:
RLI
By lionofludesch
10th Feb 2015 14:00

Don't worry

murphy1 wrote:
Nope...they don't!

Don't worry.  If they've deliberately understated their income, they wouldn't get a pay-out anyway.

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By murphy1
09th Feb 2015 18:36

No
Sorry, duplicate

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By pawncob
10th Feb 2015 15:52

Does he work for HSBC?

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By murphy1
10th Feb 2015 17:30

Deliberate mistatement in this case, and so no insurance would pay out. He was however advised by a client in April last year, that they received a letter saying that the said individual would be under tax investigation soon! Bad blood somewhere and also understatement of income....really stupid!

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The triggle is a distant cousin of the squonk (pictured)
By Triggle
10th Feb 2015 17:48

Don't forget the potential VAT trap.

Under the threshold for the one declared self-employment and, oops-a-daisy, well over it when you factor in the missing turnover.

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By murphy1
10th Feb 2015 18:17

Triggle

He is VAT registered, so as much as it may be a bad situation, VAT will be in the undeclared amounts, which according to the client is not huge- £100 per month, however, he is away 'sweating it out' over the worst case scenario, so come Friday there may be more things to consider!

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Replying to The Dullard:
paddle steamer
By DJKL
11th Feb 2015 14:31

I concur with your hesitation

murphy1 wrote:
Triggle He is VAT registered, so as much as it may be a bad situation, VAT will be in the undeclared amounts, which according to the client is not huge- £100 per month, however, he is away 'sweating it out' over the worst case scenario, so come Friday there may be more things to consider!

My internal radar would be signalling that whilst it is possible HMRC opened up an enquiry just re trading income subject to vat, £1,200 p.a. for a vat registered trader, is unlikely to have been the trigger (HMRC,  IMHO, are not going to have that level of detail re his already disclosed trading  income to detect that level of discrepancy without checking his books) So my concern would be is there a complete unknown source of income that HMRC have evidence about but you, as yet, do not?

My most frustrating one years ago was re a client where HMRC were letting nothing slip re source and our client was giving us nothing. Eventually I managed to get the Inspector ( I think he was sympathetic to my plight ) to suggest I asked our client , "Do you like fishing? "It turned out that the client and a friend had been out catching seafish and selling them via a local fish merchant, their names had come up re investigation of black fish landings.

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RLI
By lionofludesch
11th Feb 2015 14:09

Amazing how the most gung-ho client will collapse into a gibbering wreck at the first sign of an enquiry.

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