neil tipping cch senior tax consultant hmrc enquiries update

Neil Tipping

CCH Senior Tax Consultant

HMRC Enquiries Update

Current Issues

HMRC Information Powers

Single Compliance Process

Alternative Dispute Resolution

Business Record Checks

Legislation – Schedule 36 FA 2008

Powers To Obtain Information and Documents

Powers to Inspect Premises and Other Property

Further Powers

Restrictions on Powers

Appeals Against Information Notices

Special Cases

Penalties

Offences under the Criminal Code

Statutory Records

What are “Statutory Records”?—S.12B TMA 1970—CH11200 – General—CH11300 – Businesses—CH11400 – Company Records—VAT Notice 700 and 700/21

Power to obtain information and documents

Taxpayer Notice

Third Party Notice

Approval of Notices

Copying Third Party Notice to Taxpayer

Identity Unknown Notices

Time Limits to Comply

Producing Copies of Documents

Power to inspect premises and other property

Business premises—Assets—Documents—Premises

Power to Inspect Premises of Involved Third Parties

Power to Inspect Premises used in Connection with taxable supplies

Power to Inspect premises for valuation purposes

Tribunal Approval

Penalties

Power to inspect premises and other property

Further powers

Power to Copy Documents

Power to remove Documents

Power to Mark Assets and record information

Restrictions on powers

Documents not in person’s possession or power

Types of information—Pending appeals— Journalistic material—Personal records (i.e. personal health material)

Old Documents

Taxpayer notices following return

Deceased persons

Legal Professional Privilege

Auditors (but . . . para 26 sch 36)

Tax Advisers (but . . . para 26 sch 36)

Appeals against information notices

Statutory Records? – you can’t appeal

Third party notices

Identity unknown notices - onerous?

Procedure—In writing—Within 30 days of date notice is given—With grounds for appeal

Special cases (1)

Supply of Goods or Services—No requirement for consent to approval for 3rd party

notices—No right of appeal against such a notice

Involved third parties (defined in para 61A sch 36 FA2008)—No requirement for approval —No requirement to copy third party notice to taxpayer—Can be appealed against on any grounds apart from

where that person’s statutory records requested

Registered Pension Schemes

Groups of Undertakings

Change of Company Ownership

Partnerships

Herd Basis

Counteraction Notice Recipients

Special cases (2)

Penalties (1)

Failure to Comply or Obstruction

Daily Penalties

Inaccurate Information or Documents

Concealing/Destroying Documents—Following information notice—Following informal request

Failure to comply with Time Limit

Reasonable Excuse

Assessment Time limits

Right of Appeal

Tax Related Penalty

Penalties (2)

Offences under the criminal code

Concealing Documents following formal notice

Concealing documents following informal notification

Fine or imprisonment

Single compliance process (SCP)

What is it?

How will agents and clients be affected

How should they be dealt with by the agent community

SCP levels of enquiry

The four levels of enquiry are : Correspondence only with no need for on-site inspection

or face to face meetings

Simplified and faster route where lower intensity of face to face intervention may be required

More technically involved cases where a broader understanding of the business is required.

The most complex cases such as those involving aspects of evasion or where there are high levels of complexity

SCP stages

There will be 5 distinct stages for the SCP, most of which will be invisible to the taxpayer - these are:

Planning – Initial risk review and consideration for cross-taxes treatment

Contact – Formal enquiry notices and information requests issued

Process – review of information, dialogue with taxpayer and/or agent, on site records reviews

Resolve – The purpose of this stage is to follow settlement procedures in order to bring the correct tax into charge.

Close – finalisation of paperwork and onward referral to any specialist risk teams if necessary (i.e. National Min wage, CIS review teams etc.)

Current issues

Consultation

Use of Email

Openness and Early Dialogue

Opening Approach

Implementation

Alternative Dispute Resolution (ADR)

Background

Aims

What issues does it deal with for Agents and Clients?

Cases potentially suitable for ADR may involve any of the following features:

Facts which are capable of further clarification Disputes that may benefit from obtaining more suitable

evidence Fact and/or technical matters in which there is legitimate

scope for any party to obtain a better understanding of the other’s arguments

Issues which are capable of further mediation and settlement by agreement within the framework of the Litigation and Settlements Strategy (LSS)


Cases not suitable for ADR may involve any of the following features:

Cases which cannot be legitimately settled within the parameters of the LSS other than by litigation

Issues which require clarification in the wider public interest. These might include matters of industry wide application

Issues linked to or involving co-ordinated appeals issues (‘Stood behind’ cases) e.g. ‘Compound Interest’ type disputes

Cases that could only be resolved by an HMRC departure from its established technical or policy view


If you are involved with enquiry cases where either the case is going nowhere and/or communication between HMRC and the client has broken down, please consider recommending that the case be referred to ADR

To do so, the agent merely needs to register the case with the ADR team by telephone on 01492 523747 giving the name of the client and tax reference plus the name of the caseworker


Business Record Checks (BRC)

What are they?

What happens during a BRC?

Why were they suspended earlier in the year?

What problems were encountered during the trial phase?

What are they being replaced with?

Level 1 – Educational Tools

Level 2 – Targeted Assistance

Level 3 – Leverage Exercises

Level 4 – BRC checks

Level 5 – Full audit/intervention

Business Record Checks (BRC)