BKL's David Whiscombe explains why dates of issue and delivery of enquiry notices are important.
HMRC have an unfettered right to enquire into any tax return for any year.
However, there is a time limit for their doing so. When a return for a tax year has been filed on time (that is, in most cases, by 31 January following the end of the tax year) the time limit for giving a notice of enquiry expires on the anniversary of filing. If it’s filed late or is amended after filing, different enquiry time limits apply.
So when is a notice of enquiry “given”? It’s when it is actually received: not when HMRC issue it. Where a notice is posted, the law deems it to have been “given” at the time when the letter would be delivered in the ordinary course of post. But (and it’s an important but) this deeming applies only unless the contrary is proved.
This means that if you can show that you did not in fact receive the notice until after the expiry of the time limit, the notice is invalid. The reason for the delay doesn’t matter: but the onus is on you to show that it was delivered late.
For example, assume you filed your 2016/17 tax return on 31 January 2018. On 1 February 2019 a letter arrives from HMRC (dated 28 January – or 28 December, come to that: the date on the letter doesn’t matter) announcing HMRC’s intention to enquire into the return. Too bad: it’s too late. Even if HMRC can show that the letter was posted on time and postage properly paid and that it ought to have arrived on time, the assumption that it did so arrive is displaced by the facts.
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