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Company tax: Changes to the enquiry window cause chaos for agents

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28th Nov 2007
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The corporation tax enquiry window for small companies and small groups will be changing for returns for accounting periods ending on or after 1st April 2008. HMRC has been writing this week to all corporation tax cases to advise of the changes, and inadvertently, it appears, to be a few non corporation tax cases as well as writing to tax agents who do not appear to be agents in the process.

Enquiry window changes
Under changes made in the 2007 Finance Act, on Lord Carter’s recommendation, the corporation tax enquiry window is changing for accounting periods ending after 31st March 2008. For returns filed from 1st April 2008 onward, the enquiry period into that return (if filed on time) will be 12 months from that date on which HMRC receives the return.

For example:
If a company files a return for its year ending 30 April 2008 on 26 November 2008, notice of enquiry will not be given after 26 November 2009, 12 months after delivery.

For company returns filed up to 31st March 2008, the filing period is unchanged and remains 12 months from the statutory filing date (which is 12 months following the period end). There is also no future change for companies or groups that are not small.

For companies who file their returns late, there will be no future changes, the enquiry window still closes on 31 January. 30 April, 31 July or 31 October next following the first anniversary of the day on which the return was delivered.

Chaos?
Several reports have come into Accountingweb’s Any Answers forum that HMRC’s letters on this topic have been sent out to agents who either do not act for the cases concerned, or who are just not agents at all.

Longstanding member, Phil Rees, reports:
“A client has received a letter from the Corporation Tax Unit in Cumbernauld informing him of the new enquiry window for company tax returns. It says that this is because he is an agent who has or has had corporation tax clients. It even quotes an agent ID.
This client has never undertaken anything even remotely connected with accountancy and we are all bemused.”

Accountingweb’s Tax Editor, Nichola Ross Martin, has also been confused by HMRC’s latest mailout, she has received two for her own company, one for it in its original name (which was changed over five years ago) and one under the present name, complete with separate tax references and …agents. As her own agent, she was somewhat vexed. A case of corporate ID fraud perhaps?

Speaking to the accounts office in Cumbernauld to try and correct the duplication she was informed by staff that they "do not know who sent out the letter" notifying the changes, but it was sent “in error”, and that she should ignore it. It appears that there is another database problem to add to the "To-do list" then.

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By Ken.parkins
03rd Dec 2007 16:02

Out-of-date database
We, who are an import and distribution company, have just received one of these wonderful notices, addressed to an agent who moved out of this address in 1976, nearly 32 years ago!
This has to be a record.
Unless, of course, someone knows better?

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By i.macmillan
03rd Dec 2007 17:40

Waste
I am head of tax for a large group of companies and we received this notification as agent for this group. All very well but we obviously are unaffected by the changes.

I also received the notification at home where I am registered as an agent to allow me to submit tax returns for family members and a couple of friends - purely on personal tax affairs. Again the notification was of entirely no relevance.

One wonders how much time and resource has been wasted in sending these notifications out.

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