Tax experts have forced the Inland Revenue to withdraw investigation notifications issued to self-assessment taxpayers after civil servants admitted sending notices out after January’s deadline.
Hundreds of taxpayers could escape investigation of their tax affairs as a result of the blunder, which has led furious accountants to accuse the Revenue of double standards.
Under self-assessment rules, tax inspectors had until 30 January to inform taxpayers of an investigation into their 1996/1997 tax affairs. But accountants say many clients received investigation notifications dated 31 January.
A Revenue spokeswoman said this week all notifications issued on this date would be withdrawn. But she said it was impossible to tell how many taxpayers would be affected.
Tax advisers are urging taxpayers to check the date on any investigation notifications they have received. But the Revenue’s move is unlikely to quell growing rows over notifications issued in the few days before 31 January, which some firms claim they did not receive until 10 February.
Paul Harrison, tax investigations partner at KPMG, said rules state investigation notifications should be received by taxpayers on 30 January for them to be valid. The Revenue said it only needed to have sent them out by this date.
PricewaterhouseCoopers tax partner John Whiting pointed out the Revenue would not hesitate to impose a fine on taxpayers who missed their 31 January deadline. ‘The Revenue want to have their cake and eat it,’ he said.
ALL SYSTEMS NOT READY TO GO
Fears are growing that Revenue computer systems are not ready to deal with corporate tax self-assessment, writes Nick Huber.
Francesca Lagerberg, senior technical manager at the English ICA’s Tax Faculty, said the profession had heard nothing from the Revenue on the issue and feared that the software might not be ready in time for its introduction in July.
Rosalind Upton, tax partner at Ernst & Young, said the Revenue’s internal accounting system was based on individual company tax returns and not group returns, which will dominate the new system. ‘The Revenue needs to get its house in order,’ she said.
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