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Does HMRC check all self assessment tax returns?

HMRC check online tax returns

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Hi,

Does HMRC check all self assessment tax returns submitted by self employed sole traders online?

Thanks.

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By JDBENJAMIN
03rd Dec 2019 19:08

They do go through some such process of automatic selection. Is something worrying you...?

Thanks (0)
RLI
By lionofludesch
03rd Dec 2019 19:42

Doubtless there's some half-hearted checking against employer records, I suppose.

Anything that takes no human effort will be done.

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By NH
03rd Dec 2019 20:21

What are you expecting HMRC to cross check for a self employed person?

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By Matrix
03rd Dec 2019 21:20

What data could they cross reference and discrepancies from what?

Most of my sole trader clients don’t know how much they’re making so I didn’t know this info is available to HMRC. There must be industry norms against which the tax return is measured and this could flag an inspection.

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By penelope pitstop
04th Dec 2019 12:25

The original Inland Revenue computer system was originally created by the legendary William Heath Robinson, a genius who was so way ahead of his time he was in great danger of lapping himself several times over.

It was a finely-tuned piece of kit designed to identify concealed claims for lunch and sandwich expenses masked as subsistence claims.

The present mark XIII.2 version (beta stage) of the HMRC computer is a much more advanced piece of kit akin to HAL 9000 from "2001: A Space Odyssey". (Some would conclude the HMRC system is a trifle smarter).

This piece of kit is so advanced, it just knows when your accounts/tax return are not telling the truth. Just like when a wife knows that her husband has nipped into the pub on the way home for a sly pint, with the lame excuse that he has had a puncture, hence the delay. Your wife just knows you are fibbing.

The XIII.2 seems to have a "sixth sense" and can sniff out a rotten set of accounts/tax return a mile away.

So, the moral is, ensure that your accounts/tax return consist of an honest set of figures with no dodgy claims. BE AFRAID. BE VERY AFRAID. HMRC IS COMING TO GET YOU.

Thanks (8)
Replying to penelope pitstop:
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By Mik3
04th Dec 2019 10:03

Posts like this are why we need the addition of emojis or responses stronger than "Thanks" on Accountingweb.

That said, you've just set off another coughing fit, so thanks for that, Penny.

Thanks (1)
Replying to penelope pitstop:
Hallerud at Easter
By DJKL
04th Dec 2019 10:51

But still not sure they have yet developed GPP

Readers of the late Douglas Adams will spot what I mean, but lets just say, for those uninitiated non HHGTG individuals (those of you with no souls), that all the automatic doors do not yet have a sunny disposition.

Thanks (1)
Replying to DJKL:
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By 356B
04th Dec 2019 11:35

I'm so depressed.

Thanks (1)
Replying to DJKL:
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By vinylnobbynobbs
04th Dec 2019 11:45

But they do use the improbability drive to calculate tax codes.

Thanks (3)
Replying to vinylnobbynobbs:
Hallerud at Easter
By DJKL
04th Dec 2019 13:24

Strictly they use the Infinite Improbability Drive to produce infinite coding notices and they do not have a Heart of Gold.

Thanks (2)
Replying to DJKL:
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By NH
04th Dec 2019 13:32

DJKL wrote:

they do not have a Heart of Gold.


"And I'm getting old" (Neil Young/God reference)
Thanks (1)
Replying to NH:
RLI
By lionofludesch
04th Dec 2019 13:42

NH wrote:

DJKL wrote:

they do not have a Heart of Gold.

"And I'm getting old" (Neil Young/God reference)

The bloke who scored the goal in the 1969 FA Cup Final ?

Thanks (1)
Replying to lionofludesch:
Hallerud at Easter
By DJKL
04th Dec 2019 15:33

The man who might have been being referenced by The Osmonds (he was not I hasten to add) and who Ronnie Van Zant hoped would remember.

Thanks (1)
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By SXGuy
04th Dec 2019 07:18

I believe hmrc have some info in which they would expect to see certain amount of exp compared to turnover for certain trades and I think if data falls within these brackets it goes un checked.

Manual intervention happens when something looks way off. Could be a genuine reason but I think it's flagged at that point only.

Thanks (0)
By SteLacca
04th Dec 2019 08:45

In addition to the above, there's also a random review flagged, even if there's nothing else to give rise to a closer look.

Many "enquiries" may go unnoticed, since if the reviewing officer decides there's nothing untoward it is simply closed down at that point.

Thanks (0)
Replying to SteLacca:
By Red Leader
04th Dec 2019 10:30

SteLacca wrote:

In addition to the above, there's also a random review flagged, even if there's nothing else to give rise to a closer look.

Many "enquiries" may go unnoticed, since if the reviewing officer decides there's nothing untoward it is simply closed down at that point.

Or for "nothing untoward" read "not enough tax at stake to make it worthwhile."
Thanks (0)
RLI
By lionofludesch
04th Dec 2019 10:43

There must be some checking because, occasionally, HMRC will tell you about an employment that the client had forgotten to mention.

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By Joe Alderson
04th Dec 2019 11:32

PAYE is checked automatically as HMRC have all of the information on hand to do that. They pick up other cases by something appearing off, or too different to the industry norm. They also randomly select returns across industries to be checked.

HMRC also share information with foreign tax authorities, so if a person for example sold a holiday let in Spain but didn't tell HMRC, HMRC would likely find out about it.

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By lincolnartist
04th Dec 2019 13:09

They check the returns of people asking questions which look like they have something to hide.

Thanks (1)
Hallerud at Easter
By DJKL
04th Dec 2019 13:39

No idea if they still do it but other investigations/checks re other non direct tax matters may give rise to data coming to HMRC- many years ago there was a spree of checking black fish landings with fish wholesalers, this gave HMRC a tranche of names of parties selling to them and if your name was there but you say had not been declaring the sales you got an investigation- I also had, again years ago, clients in the Western Isles, HMRC had been doing some dot joining re island trading and a fair few entities up there got a pull.

HMRC do move (or at least did years ago) work in mysterious ways.

Thanks (0)
Replying to DJKL:
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By Joe Alderson
04th Dec 2019 15:04

Something fishy about that.

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By JoF
04th Dec 2019 13:43

Yet another post amended after receiving several replies.
Here is the original post

''HMRC check online tax returns
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Hi,

Does HMRC check all self assessment tax returns submitted by self employed sole traders online?

Is this done automatically - i.e. when one is submitted online, is it automatically cross referenced with data on their connect computer system?

If there are any discrepcencies, it is flagged for manual review and audit by a human?

There must be some kind of automatic process in action - else who calculates how much tax is due for online returns? Real people in an office, or a computer scanning the online returns automatically?

How do they check if the figures on online tax returns are correct?

Thanks.''

Thanks (0)
Replying to JoF:
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By 356B
04th Dec 2019 15:16

Not as redacted as this one though.
https://www.accountingweb.co.uk/any-answers/tax-32

Thanks (1)
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By whitevanman
04th Dec 2019 18:59

The short answer is yes but it is wrong to think about a single system. There are numerous computer systems which are linked to provide information across not only taxes but also benefits, capital and investments. They have started to make extensive use of their Artificial Intelligence to identify cases for enquiry.
The main systems at the moment are:
For corporates, a Revenues and Payments system to provide analysis of returns (all sources) and identify disparities.
Ridiculously, they acquired a second-hand system from the Canadian revenue known as Income and Taxes Evaluation, a system that cuts across corporates, self-employed and employees.
Thirdly, for traders, a system of records, analysis, sampling and highlighting of business inaccuracies and non-compliance.
Big Brother is definitely watching you and failing to file or filing incorrect returns is no longer a viable option. You have been warned!

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