Taking Account

Subscribe to our monthly e-newsletter.

  • Taking Account

HMRC New Single Compliance Process

August 2011

There seem to be a never ending stream of initiatives from HMRC relating to how they handle tax enquiries where (rightly or wrongly) they consider that something needs explaining.

The last thing we want to do is worry you unnecessarily, as we will always try to minimise the chances of an enquiry into any aspect of your tax affairs, but we can bring you some comforting news in that HMRC’s procedures are being streamlined with the aim of reducing the time an enquiry takes. Specifically there will now be 4 levels of enquiry under the Single Compliance Process (SCP):

LEVEL 1
This is where there is no need for a face to face meeting. Maximum time estimated to work the enquiry is 1.5 days.

LEVEL 2
A simplified and faster route for those cases where a lower intensity face to face intervention is required. 2 days estimated.

LEVEL 3
Cases requiring a greater amount of time because the depth and breadth of the enquiry is more involved. 4 days estimated.

LEVEL 4
The most demanding cases such as those indicating tax evasion characteristics or those highly complex in nature. 8 days estimated.

Clearly this is a resource driven initiative, being sold to us on the basis that it will reduce the time, costs and hassle experienced by you and us. We will ensure on your behalf that if you are ever unfortunately selected for an enquiry the adoption of the SCP approach will not see any of the following happen:

1. HMRC unfairly seeks to obtain agreement to additional taxable profits arising, by encouraging you to settle because you want to HMRC to make a speedy exit. We will not allow HMRC to rush things along if we consider that will be detrimental to you.

2. HMRC use SCP but wrongly identify what they consider to be risk areas – perhaps as a result of only a superficial consideration of what they regard as facts but which in reality are nothing of the sort. That may well be derived from a check-list review which we feel shows a basic lack of understanding of how your business operates.

3. HMRC attempts to apply a higher level to the enquiry than we consider is justified.

4. HMRC use the new 4 levels approach to insist on a meeting with you whereas we consider that all can be settled without that.

5. A tax enquiry becomes drawn-out and HMRC seemingly refuses to apply this initiative when it is adopted nationwide (planned to be from January 2012).

Hilton Sharp & Clarke