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Where Taxpayers and Advisers Meet

Another investigation without merit?

ziolablue
Posts:1
Joined:Sun Jul 30, 2017 8:18 am
Another investigation without merit?

Postby ziolablue » Sun Jul 30, 2017 1:30 pm

Mrs T had her personal tax return investigated by HMRC. They said the small private company she worked for had put through 10K on the payroll but she was only showing 5K on her tax return. We knew we had only put 5K through RTI and in the end (because HMRC called liar liar pants on fire) she in her capacity as company secretary provided details of the RTI company payroll submissions confirming only 5K was put through. The enquiry was closed.

Within a matter of weeks, an enquiry was opened into the company asking about consultancy expenses for the same period.

I suggested the company had already been subject to an enquiry (albeit via the company secretary's personal ITR) and the HMRC officer's first response was this was an enquiry into a different aspect of the company. This was consultancy fees not payroll. I then put my objection in writing and he has now come back saying the enquiry into an employee's tax return is not relevant. Is this right even though they requested details from the company to settle the dispute. Surely the company has already been 'the subject of enquiry for the same period'??

If this isn't enough, the company has been dormant and not trading for nearly 2 years now, with all bank accounts closed and all liabilities settled with no money left.

If the director ignores the request for information, is there anything HMRC can do. I had a bit of a look at the legislation and it looks like they can only issue penalties to the company which would seem futile and pointless?

And with no money left in the company, any investigation is surely going to result in nothing for the treasury anyway??

The books are fine, I just wanted to resolve this with the least possible hassle. I feel like we are being targeted/harassed and I don't want to pander to a request which appears to ultimately be fruitless? If I give in to this request when will it end....

Any help or advice would be very much appreciated.

SteLacca
Posts:448
Joined:Fri Aug 07, 2015 2:17 pm

Re: Another investigation without merit?

Postby SteLacca » Mon Jul 31, 2017 11:07 am

The company and the secretary are completely separate legal entities, and so HMRC are correct that the earlier enquiry does not affect their rights in the later enquiry.

With regards to information, if this is not sent then HMRC can issue a Sch 36 notice which, if not complied with, will lead to penalties.

robbob
Posts:3228
Joined:Wed Aug 06, 2008 4:01 pm

Re: Another investigation without merit?

Postby robbob » Mon Jul 31, 2017 7:10 pm

Ziolablue can you advise when the enquiry window ended with regard to the corporation tax period being enquired about please.

if the enquiry widow has now ended (i would presume this is the case if the returns were filed on time) can you advise whether hmrc specifically suggested something might have been wrong with the return submitted when they directed their quesstions to the company.


see 10.6 on the following link for details of working out the enquiry window end date.
https://www.gov.uk/government/publicati ... t620-notes
The most likely date is calculated as follows
most returns delivered on or before the filing date at any time up to 12 months from the day on which the return was delivered

SteLacca
With regards to information, if this is not sent then HMRC can issue a Sch 36 notice which, if not complied with, will lead to penalties.
SteLacca - with regard to hmrc enquiring into the company - if we take the viewpoint that the normal enquiry window has closed (op can hopefully confirm this) i would be interested on your thoughts about hmrc's ability to ask general questions about the closed period return (eg querying the consultancy expenses total) IF these are simply general "fishing type" questions rather than of the nature that they have some reason to believe something was wrong with the return.

bd6759
Posts:4262
Joined:Sat Feb 01, 2014 3:26 pm

Re: Another investigation without merit?

Postby bd6759 » Mon Jul 31, 2017 7:43 pm

An enquiry is made into a return. A company can have any number of enquiries relating to the same period: RTI returns, CT Returns, VAT returns and many other indirect tax returns, An enquiry into one does not prevent an enquiry into the other.

An enquiry into a director's or employee's tax return does not prevent an enquiry into the company's CT return. A different return, made in a different capacity in respect of a different tax.

As to the merits of the enquiry, that is impossible to say. HMRC can enquire into any return, with or without a reason.

If the enquiry window has passed (and there is nothing to suggest that it has) they must have a good reason to suspect that something is wrong.

robbob
Posts:3228
Joined:Wed Aug 06, 2008 4:01 pm

Re: Another investigation without merit?

Postby robbob » Tue Aug 01, 2017 10:52 am

bd6759
If the enquiry window has passed (and there is nothing to suggest that it has) they must have a good reason to suspect that something is wrong.
Hello bs6759 - thanks for adding you thoughts here, from what the OP had posted it wasn't clear to me that hmrc had any good reason for believing anything was wrong,with regard to the company tax return - particularly if they had been provided chapter and verse with regards to the RTI issue which wasn't' if the op is correct in what they posted.


With regard to the enquiry window being closed the op did say the following which made me suspect the enquiry window would probably be closed now - hopefully the op will clarify as appropriate.

the company has been dormant and not trading for nearly 2 years now, with all bank accounts closed and all liabilities settled with no money left.


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