I have a client who is a self employed cleaner with lots of different concerns, mainly holiday cottage owners. For whatever reason 2 of her clients decided to show her income through the PAYE system for 2011. S9A enquiry letter quite understandably issued by HMRC as no PAYE income shown on the Tax Return.
This was cleared up very quickly when all was explained and agreement reached for NT coding for both of these concerns. All nice and easy so far!
As a belt and braces exercise and to try and stop any future problems I included an explanation in the white space of the 2012 Tax Return regarding the income from these 2 sources .
Explanation ignored by HMRC and S9A enquiry issued on exactly the same grounds as for the previous year. I 'phoned HMRC and explained it all again and followed this with an explanatory letter. Unfortunately HMRC cocked things up big time and issued a determination. An appeal and complaint followed and this ended with HMRC upholding the complaint in full and offering to pay my fees and to give the client compensation.
I felt a warm glow of satisfaction at a job well done when the letter confirming this arrived last Friday.
This did not last long!
In the same post was - yes you've guessed it - a S9A enquiry letter with regard to the 2013 Tax Return on exactly the same grounds as for the 2 previous years. I 'phoned HMRC and suggested that he drop this like a hot brick and send a letter of apology to the client. I am awaiting his response as I write this.
What came out of the 2012 enquiry was the fact that past enquiries may not be flagged up as a permanent note so that there is nothing to stop the same line of enquiry being followed year after year. I warned HMRC this may happen in 2013 and my prophesy seems to be coming true. This state of affairs seems incredible as previous enquiries would be crucial in identifying persistent and habitual failures which would have a bearing on penalty levels and how the enquiry is handled.
I am now off to find a brick wall to bang my head against.
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I have had the income problem
with Consulatnts who work for Universities.
But never had the enquiry.
I understand the white space is read on enquiry only so why not add. "If HMRC are thinking of opening a S9a enquiry It is recommended that the S9a enquiry notes for <last year> are read before doing so."