TaxPersonal TaxSA breakdown probe begins

SA breakdown probe begins

Revenue launches internal investigation into January's wrongly issued self-assessment tax notices.

The Inland Revenue has launched an internal inquiry into how civil servants dealing with self-assessment came to issue tax investigation notices after the department’s self-imposed January deadline.

Earlier this month, the Revenue was forced to withdraw investigation notices for 1996/1997 tax affairs posted after the 30 January deadline. The blunder means that hundreds of taxpayers will escape investigation into their tax affairs.

Local tax offices will investigate the issue, but it is still far from clear how many late notices were issued under the beleaguered self-assessment regime.

A Revenue spokeswoman said the reviews were on a local basis and that other aspects of the self-assessment regime were under ongoing review.

News of the investigation, however, did little to calm mounting frustration from tax experts, seething after a spate of errors in this year’s self-assessment round.

Richard Shooter, a partner at Henstock Shooter and chairman of the English ICA’s tax monitoring group, said the Revenue was wrong to insist that letters could be sent out on 30 January and still meet the 31 January deadline. ‘With first-class post, it’s deemed to arrive the next day, so 29 January was the latest deadline to post inquiry notices, not 30 January,’ he said. ‘Most Revenue letters are second class.’

One potential upside for taxpayers is when an investigation notice was issued late into a specific aspect of a taxpayer’s affairs – an aspect inquiry – the Revenue would not only be unable to investigate the query this year, it would also be unlikely to revisit it in the following tax year.

Shooter called for the government to launch a wider review into self-assessment, similar to the last year’s consultation document between the Revenue and the accountancy profession.

This view was echoed by Paul Harrison, a tax investigations partner at KPMG.

He argued that the Revenue needed to clarify internal guidelines for self-assessment and improve staff training.

‘The Revenue needs to give staff clearer instructions over deadlines and check that notices are sent out by appropriately trained technical inspectors,’ he said.

Related Articles

LITRG urges government to consider tax changes in disability work plan

Administration LITRG urges government to consider tax changes in disability work plan

4d Lucy Skoulding, Reporter
HMRC appeal rejected in Tottenham Hotspur case

Administration HMRC appeal rejected in Tottenham Hotspur case

3w Emma Smith, Managing Editor
HMRC urged to clarify impact of income allowances on Self-Assessments

Personal Tax HMRC urged to clarify impact of income allowances on Self-Assessments

2m Alia Shoaib, Reporter
New trading allowance: simplicity, but not as we know it

Administration New trading allowance: simplicity, but not as we know it

2m Emma Rawson, ATT Technical Officer
Wealthy individuals could circumvent top tax rate rises

Personal Tax Wealthy individuals could circumvent top tax rate rises

4m Alia Shoaib, Reporter
Italy grants first successful non-dom status application to former UK non-dom

Personal Tax Italy grants first successful non-dom status application to former UK non-dom

4m Emma Smith, Managing Editor
Industry reaction: Taylor Review does not go far enough in addressing tax issues

Legal Industry reaction: Taylor Review does not go far enough in addressing tax issues

5m Alia Shoaib, Reporter
Does the Taylor Review sufficiently address the gig economy?

Corporate Tax Does the Taylor Review sufficiently address the gig economy?

5m Alia Shoaib, Reporter