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HMRC enquires during January: How to cope

15th Jan 2014
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The run up to the 31 January self assessment deadline is stressful enough, with clients providing information at the eleventh hour and many other issues that may arise, without HMRC adding to the pressure by raising enquiries into your clients’ returns for a prior year.

It is worth bearing in mind that HMRC are also under pressure to ensure that enquiry window deadlines are not missed; this is why a large number of enquiry letters are issued at this time of year.

The time saving tips below should help you reduce any potential pressure arising from this during the tax return season and save valuable time and effort: 

Which HMRC office issued the letter?

On receiving an enquiry letter the first step should be to identify from which HMRC office this has been issued. Is it Local Compliance, the Offshore Co-ordination Unit or perhaps even Specialist Investigations? The issuing office should provide clues as to the nature and severity of the enquiry.

Assessment deadlines

The next step is to ensure that the letter complies with the correct enquiry and assessing time limits. 

An enquiry under Sections 9A and 12AC Taxes Management Act 1970 should be opened within the 12 months after the tax return was filed. 

Remember that any amendments made to the return following submission and after the due filing deadline or if the return was filed late, will extend the enquiry window to the quarter day (31 January, 30 April, 31 July or 31 October) following the first anniversary of the day the return was either amended or filed late.

If the letter refers to earlier years then it is important to consider whether HMRC has the power to raise discovery assessments in respect of these periods. 

If the year in question is more than four years beyond the current year of assessment then HMRC is contending that there has been careless or deliberate behaviour.

Focus on the tax returns

At this time of year it is more important to focus on the timely delivery of your clients’ self assessment returns and ensure that these are filed correctly than it is deal with an HMRC enquiry into a prior year.

It is likely to be far easier to communicate directly with the Inspector dealing with the enquiry and ask for an extension than it is to appeal a late filing penalty.

Managing an enquiry will generally not be accepted as a reasonable excuse for the late filing of a return. Provided you contact HMRC shortly after the enquiry letter has been received, most Inspectors understand the pressures of this time of year and will allow a reasonable extension for responding to the newly opened enquiry into your client’s tax affairs.

Is it a simple issue?

In a concerted effort to assist taxpayers and their agents, HMRC is consciously trying to reduce the administrative burden when it comes to dealing with enquiries.

As the saying goes, ‘it’s good to talk’ and if the issue(s) outlined in the enquiry letter are straightforward it may be that a short telephone conversation could resolve the matter.

This is likely to be far less time consuming and more cost effective for your client than drafting a letter. It also provides an opportunity to open the channels of communications with the Inspector to discuss the concerns he may have regarding the tax affairs of the client if it cannot not be resolved over the phone.

HMRC also offers compliance checks over the telephone, again a quick and efficient way of dealing with any concerns they may have.

Does the letter include a request for information and/or documents?

On reviewing the enquiry letter, it is important to focus on what information the Inspector is requesting. It may be that some or all of the information requested is not relevant to your client or relates to years which are out of time. Are the information/documents requested disproportionate to the apparent risk? 

This may be the case when HMRC have issued a standard request which tends to have the ‘kitchen sink’ approach to requesting information/documents.

In these situations it may be worth calling the Inspector to discuss what is relevant to your client and look at potentially reducing the information required. This also provides the opportunity to negotiate an extension for providing the information/documents requested until after the 31 January filing deadline.

Is the information requested in the power/possession of the taxpayer?

Finally, when dealing with an enquiry letter, it is advisable to assess what information your client holds and what information they have the power to obtain.

Once you have an idea of the information that is readily available to the client it may be advisable to call the Inspector and advise that while certain items of information are within the client’s possession/power to obtain it may take some time, leading a way forward to discussing an extension for the production of such documents until after the self-assessment filing deadline.

The important message here is don’t panic! It is our experience that provided you communicate with HMRC at the earliest opportunity to discuss either resolving the issue or negotiating an extension to the deadline, the pressure can be greatly reduced allowing you to focus on meeting the self-assessment deadline.

Isobel Clift joined Gabelle in July 2013. She advises on a range of tax investigation matters in she is experienced in the management of suspected serious fraud cases under Code of Practice 9 and tax avoidance cases under Code of Practice 8 as well as assisting clients with voluntary disclosures.

Replies (15)

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15th Jan 2014 12:46

Good sensible advice

Thanks Isobel.

Any thoughts on CG34 valuations disputes where a goodwill value offered is still not agreed prior to submission of the tax return - other than putting an explanatory note on the tax return itself.


Say hi to Vaughan from me 



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By David Treitel
15th Jan 2014 13:49

Presumably HMRC enquires when it wishes to raise an enquiry; but given the enquiry deadline it seems likely that HMRC may raise more enquiries in January than in an average month.

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By TaxTeddy
15th Jan 2014 16:24

Common sense prevails... HMRC it seems. When chatting to an inspector about an enquiry notice issued in late December, he was very aware of the January pressures we face - and very accomodating about deadlines.

Nice to see.

Thanks (2)
By carnmores
15th Jan 2014 16:36

the answwer is to shorten the deadline by 2 months

or extend it by 1

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By ireallyshouldknowthisbut
15th Jan 2014 16:54


I always just write a 2 liner and say "busy, will write to you in Feb" by the time they have actually opened the letter and read it the actual reply will have been issued in any case, so tough if they complain.  

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By allsaintchris
20th Jan 2014 11:05

Ask for extra time

Simply call the officer and request an extra 30 days or so becuase you can't respond due to the commitments of the 31 January deadline  Most are more than happy to agree to this.

Worst thing you can do is ignore the letter as HMRC are then likely to issue a Sch36 notice, which they seem to do now a lot quicker than they used to once the initial 30 day period is up and they haven't heard anything.

All they are doing is making sure they get the enquiry notice issued within the statutory period, they don't care too much if they have to wait a little longer for the response.

Thanks (1)
By jdixon2614
20th Jan 2014 11:51

Deadline for Enquiry

Just checking that I understood correctly the time limit within which HMRC need to raise an enquiry.

If I submit my tax return for the year 2013-2014 on, say, September 10th 2014, does that mean that if HMRC wanted to enquire into that return, they would have to notify me by September 10th 2015, or by January 31st 2016?

Thanks, John

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By allsaintchris
20th Jan 2014 12:00

The notice has to arrive by

The notice has to arrive by 10th Septmeber as HMRC have to allow a certain number of working days for the letter to be sent.

So, if the letter was issued on say 6th or 7th September you could send back the enquiry notice as being late, unless HMRC have made a discovery which would allow them to raise an enquiry after this date. 

Thanks (1)
By jdixon2614
20th Jan 2014 12:38

Thanks allsaintchris

That's interesting...

I received a letter from HMRC on January 8th 2009, stating that they intended to enquire into my 2006-2007 tax return, which I submitted in September 2007. So, it seems to me that HMRC should have sent the letter to me by September 2008 ... and not January 2009. I haven't heard from them since by-the-way, although I understand that they can sit on these things for years after they've sent out the enquiry letter.

Thanks (0)
By allsaintchris
20th Jan 2014 13:36

Check 06/07 enquiry window, may be different to now

Back then in 06/07, I'm pretty sure (without looking up to double check when it changed) they had 12 months from the due filing date to enquire, it's only in the last couple of years it has become 12 months from the date the Return was actually filed.

I'm afraid I think HMRC were in time for that year.

Does seem strange they have sat on it, unless it was a protective enquiry against a scheme, EBT/EFurbs etc which they have sat on pending the outcome of tribunal hearings.



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By David Franks
20th Jan 2014 13:00


I was asked to do something by HMRC in order to get my client a refund that he is genuinely due. I wont go into it on here but their suggestion was illegal, wrong and stupid but they said unless I did this my client could not get a refund. Luckily I have all this in writing and also my written response saying why I didnt agree with what they were swaying, I was doing under duress and when this lead to an enquiry I would direct HMRC to this individual and all costs relating to it would be paid by hmrc and I was taking no responsibility. Surprise surprise this is now being the subject of an enquiry. I am waiting for the letter to arrive. In the midst of all this internal wrangling is a client almost going bust who has been waiting for this money since May last year. It is a substantial sum.I have never had a single client enquired into before so I am not that au fait with it. bearing in mind what I have said, what do you think will happen? Luckily I can prove everything in letters in both directions. 

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Replying to lionofludesch:
By allsaintchris
20th Jan 2014 13:39

Get assistance


If you are unsure, you should look to get specialist advice to help you on your way.  Is always better to get this at the start, as often I find I get involved half-way through an enquiry where the damage already done can be hard to rectify.

I can assist if you wish and would be happy to look at this for you if you would PM or email me with some more details about what has gone on.



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By David Franks
20th Jan 2014 15:24

HI, I think perhaps I worded my post badly. I am 100% confident of this case and totally in the right. My main worry was whether as this is going to highlight a serious blunder by HMRC whether they will acknowledge that and hold their hands up or whether they will try and waste time justifying their error. The fact they made a serious error is not up for debate and is backed up with correspondence. 

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By allsaintchris
20th Jan 2014 16:20

Reliance on HMRC

I guess then you're dealing with the old problem of whether you can rely on previous advice from HMRC!

With HMRC's general attitude on enquiries at the moment, I'd say dig your heels in as best you can. You've always got the the various review and appeal procedures you can use if you think HMRC are not playing ball.

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By David Franks
20th Jan 2014 17:07

Hi Chris, sorry I don't think I am explaining this very well. I am not relying on HMRC for advice. I am an experienced tax accountant of 30 years being told to do something stupid by someone who had no clue what they were doing. I have their request in writing and also my response saying I totally disagreed as it was wrong, illegal blah blah blah and that I was not going to be responsible for dealing with the obvious ensuing HMRC enquiry that would follow such stupid action, I then have more correspondence telling that I have to do this. So basically I feel like directing the enquirer back to the person (who I have the name of) who requested this as that is what I said I would do in writing at the outset. 

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