Tax Enquiry Appeal

[LMT8]

Our client is currently under a tax enquiry and has mislaid the records requested by the tax inspector. There were some delays in responding to the initial letter and it appears that the inspector has interpreted this as a deliberate attempt of prevarication. Two months after our reply to the opening letter, the inspector had responded by adding back virtually 100% of the expenses claimed on grounds that receipts were not provided. This was despite our explanations that our client had moved house numerous times within the last three years, leading to dispersal of paperwork. The inspector has closed our client’s tax enquiry on this basis and there is a net additional tax liability of nearly £4,500, resulting from this. We have appealed against this, but were wondering if we would be able to request the appeal to be reviewed by another tax inspector, or whether this could prejudice our client’s situation.

[Lambs]

L,

I should suggest that it is not necessarily at the stage that you should be requesting 'a second opinion,' from HMRC. Under the normal rules for Self Assessment, it is open to your client to appeal against this assessment.

I suspect that the Inspector is looking for a quick getaway, (hence the assessment), as the amount of tax yielded will not be substantial in his eyes. If he'd wanted to 'camp,' then the next stage would have been a s.19A notice.

It follows that you may well be in a position to suggest a more appropriate amount and that a mutually acceptable adjustment will follow in fairly short order - I realise, however, that the tone of his correspondence thus far might well indicate otherwise!

Regards,

Lambs

[King_Maker]

Without any paperwork, negotiation is required.

If you fail to agree, then there are only 2 options :

a) Accept the Inspector's figures. OR

b) Go the General Commissioners - the Special Commissioners are unlikely to accept such a non technical Appeal.