Self Assessment - Enquiry

by **nicosia** on Thu Dec 24, 2009 10:46 am

Hello All,

I could do with and would appreciate a little help with responding to a HMRC enquiry regarding a SA return for YE 5 April 2008. It seems to have come from a Compliance Dept and is indeed a Compliance Check. Essentially it concerns one entry in particular "Taxed Bank and Building Society Interest". It states that their information shows x whereas I indicated on the return 0. The form asks me to confirm their figure but I don't know what information they are working from or what account they are referring to. They then ask for details of all accounts held and amounts of interest received for that year. And finally I need to provide a reason for the difference. I would appreciate any steer to close the check without it going further. For instance, what would be an advisable response regarding the account details and explanation.

Thank you for your kind help.

by **AJHenderson** on Thu Dec 24, 2009 11:42 am

Did you correctly state that there was no interest received for the year? - if you have then you can simply supply bank statements to prove this.

If you did receive interest but did not disclose it then best to come clean and amend the return to avoid interest and penalties.

HMRC get their information regarding bank interest from the banks and building societies.

You can ask HMRC to supply you with the information that they have to make sure that they have the correct record and its not an admin error at their end.

by **nicosia** on Thu Dec 24, 2009 2:48 pm

Thanks for the response.

Do you think HMRC would interpret asking for further information before continuing such as what bank/account are they referring to?

I also have a problem with providing the information as internet accounts don't provide this summary. Although I still think their figure looks wrong.

Alternatively I could just list the accounts/details.

The reason for the omission is genuine but how should it be "phrased"?

I assume it's too late to file an amendment...

by **mullet** on Thu Dec 24, 2009 4:19 pm

Do you think HMRC would interpret asking for further information before continuing such as what bank/account are they referring to?

They would probably come to the conclusion that you want to limit the information that you give them. It's often a game of cat and mouse ... and they may well know more than you realise.

I also have a problem with providing the information as internet accounts don't provide this summary. Although I still think their figure looks wrong.

I thought financial institutions were required to provide annual interest certificates by law. Can't you get the information via on-line statements?

Alternatively I could just list the accounts/details.

It will be easier in the long run, and will influence the level of penalty (if charged).

The reason for the omission is genuine but how should it be "phrased"?

Clearly and simply. And honestly.

I assume it's too late to file an amendment...

You can amend your return, but legislation prevents the amendment being effected until the enquiry is concluded (it can form part of the enquiry conclusions).

by **wamstax** on Sat Dec 26, 2009 6:16 pm

Stop playing cat and mouse as HMRC have full details of all interest credited to accounts with UK banks etc and you will gat matters resolved more quickly and efficiently if you just provide annual statements of interest as would have been provided by the banks etc. Online transaction history for online accounts will also give you interest earned between 6th April 2007 and 5th April 2008

If you omitted a certain account etc because for example it included deposits that came from other undeclared or understated income then you really need to get professional help to manage your enquiry and "as you call it phrase" matters so that it is dealt with in the most efficient way

by **nicosia** on Mon Dec 28, 2009 4:57 pm

Thank you for the detailed responses. I will chase this information with the bank as the internet dialogue does not appear to be able to provide a report.

Just to clarify, all respective tax has already been paid being deduced at source. Even with the additional interest taken into account I still fall under the PAYE lower threshold.

So shall I assume HMRC simply want to ensure records are correct?

And what if the banks don't respond in time - should I phone HMRC to keep them in picture to avoid a full escalation!

by **Trevor Scott** on Sat Jan 02, 2010 3:10 pm

As a rule don’t send bank statements, just send specific relevant information in a letter. It sounds like a simple enquiry and most likely HMRC will want it over and done with quickly.

If HMRC have raised a specific point you just need to reply with specific information. Bank statements invariably contain other information, that may itself give rise/cause for a wider unnecessary/avoidable/costly investigation.

If the return information supplied is, to the best of your knowledge, correct then in a letter … list the bank account numbers and total interest/tax deducted for that tax year alone. You could add an explanation that you did have an old account at such and such a bank that you lost track of 10 years ago, or add that you had an internet account with XYZ Plc but they don’t issue statements and as far as you are aware there is no interest. Suggest that if they have contradictory information then you would appreciate a note of it so that you may ensure your tax return is correct.

If it is the case that you have missed some interest/tax deducted from your tax return then simply write back to HMRC with a summary of the interest/tax on each bank account number and total it, showing any difference to your tax return figure. In such a case don't just double check, but triple check your return is correct that time...then amend return. Don’t apologise or say why you have made the error, don’t even describe or write the words “error”, “fault”, “mistake” etc etc .