Taxman scraps intervention enquiries 'opened in error'

As part of the pilot, the taxman sent out letters to a sample of certain
professions they regarded as likely to underestimate their tax bills.

But a number of taxpayers were investigated by
HM Revenue & Customs despite the
taxman’s pledge that non-participation in last year’s controversial
interventions project wouldn’t result in further investigation.

HMRC admitted that ‘less than 20’ non-participants were referred for further
enquiry.

There would be no repercussions if people did not respond, the taxman had
promised.

An HMRC spokesman said that enquiries had been halted, while procedures were
put in place to prevent further recurrence.

‘The enquiries were opened in error,’ he said.

Grant Thornton senior tax partner Mike Warburton said the enquiries might
damage future pilots: ‘Will HMRC get as many volunteers next time? It’s not
cricket,’ said Warburton.

The pilot was criticised by some advisers, who argued that the profession had
not been consulted on the introduction of the pilot, and interventions were
confusing and potentially illegal.

The moves were designed to urge taxpayers to correct their own tax returns
without the taxman having to use the stick of a full enquiry, but the moves
caused deep disquiet among the profession.

In the first of a series of podcasts from HMRC, director general Dave
Hartnett admitted that the interventions strategy had alienated advisers.

An HMRC report on the scheme showed that taxpayers ‘welcomed the opportunity’
to resolve minor errors, as quickly and as early as possible, and that tax
advisers were willing to work with HMRC to develop more flexible intervention
options.