Whilst a S9A enquiry used to be the Revenue's bread butter check on specific items, more recently the Revenue appear to now be taking a 'are you sure you completed the return correctly'....a softer take, albeit not covered by any legislation just merely an opportunity to volunteer any errors.
However, more worrying is the latest iteration which is along the similar lines, but clearly where they have let their software loose, picking up a number of clients where the suggestion is the finance costs have not been correctly restricted. I await the list as they failed to attach it to the letter....so I cannot at this point quantify the accuracy of the Revenues suggestion....but should this be accepted over a more formal enquiry route. Previously would have been happy to cooperate with HMRC, but they seem to approach things in a more passive aggresive way which leaves me feeling that if they 'think' there is an issue with a return then they should operate the normal enquiry approach, rather than go on what could be seen as a phishing trip. Interested to see what other peoples take on this is.....
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Personally i think it is entirely sensible that hmrc do some double checks in this area - i would not like to think what % of people who do their own make a complete mess up.
If you know your figures that are may be questioned are bullet proof correct - no reason to really give it a second thought.
I'd always have a look but I'd be 99% likely to say "yes".
Finance costs - if that's a recurring problem - should be a lot less of a problem now that the legislation is fully phased in.
should be a lot less of a problem now that the legislation is fully phased in.
Did you notice hmrc's sneaky trick of repurposing the box 26 that was claimable finance costs to now be "non residential finance costs" - so the box everyone has always used is now a box that virtually no one should use but may be drawn to by force of habbit. Do hmrc not realise people tend to be creatures of habbit - perhaps we should have no symnpathy for bods that don't check the detail -hmmmm did i actually enter stuff in box 26 once this year and only realise my stupidity when the calculation cam out wrong ? -
perhaps we should have a poll of accountants to see what % actually do "an old skool calculation first" before entering on the software- i guess that % is dwindling every year - sigh.
I still do these re our companies and our partnership to ensure I get the splits right amongst schedule D, rental income and in the case of the companies the NTLR debits and credits, excel being my friend. (I also do a proof re the tax liability arising re the companies)
I still see S9A, and I have no problem responding to them. In fact, I prefer S9A because there is inbuilt protection for the taxpayer.
In fact, I'm handling one now that could sprout arms and legs, but there is scope for voluntary disclosure for what HMRC haven't picked up on.
I called the enquiry officer and said, "look, you asked for a response by 19 December. I have to speak to our client's solicitor, who tells me there is a 'truck load' of paperwork, then it's Christmas, then it's silly season, so do you mind extending until mid February".
Her very reasonable reply was, "OK, if you can do it before, great, but if not, fine".
Now, previous enquiry officers have been far less accommodating, so I agree there is a shift of attitude, though my experience is that it's a shift back to the cooperative approach that used to exist.
I tend to find that with any deadline set by an actual human you can phone, if you call them before that deadline with anything approaching a reasonable request to extend, they always say yes.
I don't mind the general enquiry where there is some benefit for our client - pointing out an obvious error, I am quite happy to review and make an appropriate disclosure.
However, the fact that I will get a phone call from them in 14 days as a follow up suggests more than a helping hand. Its disappointing that they don't real issues in such a timely fashion. Also the lack of protection for both parties which would be their within an enquiry is concerning.
I will feed back when I get the list......a call and email has yet to produce the said list.....but no doubt the 14 days is still ticking.....
Welcome to the wonderful world of behavioural science, or the tax department's equivalent of the famous "Nudge" unit.
The "passive aggressive" approach you describe has been working its way through HMRC's tax compliance teams and has been cropping up in several different places. Rebecca Cave has been tracking the trend for more than a year and documented the most common areas for nudge letters in January:
https://www.accountingweb.co.uk/tax/hmrc-policy/confusion-and-alarm-from...
Since then, the fuzzy, "Are you sure it's right?" letters have also been dispatched to holders of cryptoassets: https://www.accountingweb.co.uk/tax/personal-tax/cryptoassets-holders-nu...
What does the letter actually say in terms of an expected response? If they haven't asked anything in particular I would probably just file it in the small round filing cabinet under my desk.
There is of course another, more sinister side to these apparently more benign, less focussed approaches - it means that anything you say is a prompted disclosure attracting higher penalties. if the enquiry was focussed on a particular subject matter, as it should be, then a disclosure of another matter could be unprompted. No longer, with this approach.
Had my first letter on this subject today. Client has residential and commercial properties, so some interest is 100% allowable. Letter says to correct Return if error made, but "ignore" if all OK. So, what's the follow-up? Do I contact HMRC to avoid a possible enquiry into something that has a simple explanation, or just file the letter? I'm getting really tired of all this bs.
