07/05/24

Success in HMRC Compliance Check

Success in HMRC Compliance Check
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KANGS has successfully represented a client who was the subject of an HMRC compliance check into her Self-Assessment Tax Returns.

Tim Thompson of KANGS explains how this successful result was achieved.

The Nature of HMRC Compliance Checks

When HMRC wishes to ensure that an individual, business or company is complying with their obligations to declare all taxable activity and paying the correct amount of tax due, it may conduct a HMRC compliance check.

Whilst HMRC compliance checks may be commenced at any time, they are frequently activated as the result of:

  • information received from someone other than the taxpayer,
  • previous knowledge of non-compliance,
  • random selection.

HMRC conducts compliance checks covering all avenues of tax liability to:

  • check that correct figures are being presented for accurate calculations of tax liability,
  • ensure the right amount of tax is being paid,
  • confirm that correct tax allowances and reliefs are being applied,
  • prevent tax evasion,
  • ensure fair and efficient operation of the tax system.

The Relevant Law

The Taxes Management Act 1970 states at section 9A:
‘Notice of enquiry

(1) An officer of the Board may enquire into a return under section 8 or 8A of this Act if he gives notice of his intention to do so (“notice of enquiry”)—

  1. to the person whose return it is (“the taxpayer”),
  2. within the time allowed.

(2) The time allowed is—

  1. if the return was delivered on or before the filing date, up to the end of the period of twelve months after the day on which the return was delivered;
  2. if the return was delivered after the filing date, up to and including the quarter day next following the first anniversary of the day on which the return was delivered;
  3. if the return is amended under section 9ZA of this Act, up to and including the quarter day next following the first anniversary of the day on which the amendment was made.’

The Case in Focus

Our client received a Notice of Enquiry from HMRC in May 2022 requesting, amongst other things, a vast amount of information to support the calculations inserted into her Self-Assessment Returns.

By way of assisting our client, the Team at KANGS:

  • examined in detail all the documentation provided by our client,
  • obtained detailed instructions upon every aspect of her completed Self-Assessment Returns,
  • advised our client upon her position and the appropriate course to adopt to mitigate her position and resolve the issues as favourably as possible,
  • collated and examined all available documentary evidence to support our client’s response to HMRC,
  • prepared our client’s detailed response to the enquiries she had received.

Detailed negotiations were conducted with HMRC which encompassed various inaccuracies in our client’s Returns dating from 2010.

The Successful Outcome

Having considered the detailed representations prepared and advanced by the Team at KANGS, HMRC agreed to amend the assessments.

Furthermore, as HMRC accepted that our client’s actions had simply been careless, as opposed to deliberate avoidance, it agreed to suspend the penalties which it had sought to impose.

Accordingly, our client was only required to pay the tax re-calculated upon the agreed amendments, a result with which our client was completely elated.

How Can We Help?

Should you receive notification from HMRC of its intention to commence an investigation of any nature, you should seek immediate expert professional advice and guidance.

The Team at KANGS provides extensive expertise when representing companies, directors, and individuals in respect of a vast array of Tax Disputes, Investigations and Prosecutions, including Compliance Checks, Enquiries and Discovery Assessments.

Please visit the following web pages for further information:

We are here to help, if we can be of any assistance at all, we welcome enquiries by:

Tel:       0330 370 4333

Email: info@kangssolicitors.co.uk

We provide a no obligation, initial consultation at our three offices in Manchester, Birmingham, and London. Alternatively, meetings can be held via video conferencing.

Hamraj Kang

Hamraj Kang
Senior Partner

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Tim Thompson

Tim Thompson
Partner

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John Veale

John Veale
Partner

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