Section 9A Enquiry can be opened outside 12 month enquiry limit?

**jbryce** · 12 December 2015, 11:39

Originally posted by snowfall View Post

I am having trouble understanding a Section 9A letter received recently. Everything I read on the HMRC manuals suggest it is invalid as it missed the 12 month window. Can anybody see what I am missing, based on the following:

- Letter is a "Check of Self Assessment tax return" being made under "Section 9A of the Taxes Management Act 1970".
- The tax year in question is 2013-2014, i.e. year ended 5th April 2014.
- This is the first letter I have received for the year.
- The letter is dated 9th December 2015.
- The letter quotes the day my tax return was received: 9th October 2014. This matches the date in my online account.
- I have no other enquiries open. I have not amended this tax return since 9th October 2014.

From what I have read on the HMRC manuals:

SALF403 - Enquiries into Tax Returns: power to enquire into Tax Returns

This misses the 12 month enquiry window that is described in section SALF403.

SAM31100 - Compliance: enquiry work: enquiry window

My return falls under Example 3 described in SAM31100, so the valid enquiry window for my return submitted on time is: 10th October 2014 to 9th October 2015. I note the extension allowed of up to 4 working days to allow for postage delays does not close the gap between the allowable enquiry end date and the date of the letter received.

SALF404 - Enquiries into Tax Returns: some notes on HMRC enquiries

Section SALF404 states 'It is not possible for HMRC to commence enquiries under the Section 9A powers once the time limit for giving a notice of enquiry has passed.'.

Am I missing something here?

Either:
- I've misunderstood the HMRC manual.
- The HMRC Officer has misunderstood the manual.
- Something else.

Note: I've obfuscated the dates.

HMRC certainly get busy around Xmas - perhaps this is an example of their policy of driving these messages out before Xmas failing? Hooray.

Your argument looks sound. If this is in relation to a tax arrangement/scheme then I suggest you join the Big Group.
This isn't going to go away.

**BrilloPad** · 12 December 2015, 12:14

Originally posted by snowfall View Post

Am I missing something here?

No you are not. They are trying it on. Write back with the arguments you put here.

It is disgraceful they should be allowed to get away with bullying and harassment. If a tax payer makes a mistake it is evasion. They can do as they please. I wish there was a way of getting out of that mindset.

Unfortunate many people believe that you have not paid your "fair share". Including the vast majority of CUK posters. Who are now discovering that the general population thinks the same about their PSCs. It would help if everyone on CUK could keep together on fight the common enemy.

**LandRover** · 12 December 2015, 14:37

Discovery is what HMRC are using on many of us.

Yes its a discovery notice, here are some guidelines

Under section 9A TMA, HMRC may enquire into a taxpayer's self assessment return if they notify the taxpayer of their intention to do so:

up to the end of the period of 12 months after the day on which the return was delivered if the return was delivered on or before the filing date;
up to and including the quarter day next following the first anniversary of the day on which the return was delivered if the return was delivered after the filing date;
up to and including the quarter day next following the first anniversary of the day on which the amendment was made if the return was amended.

However, under section 29(1) TMA, HMRC can make an assessment to make good a loss of tax if they 'discover' that there has been an under-assessment because:
any income or chargeable gain that ought to have been assessed to tax has not been assessed, or

an assessment to tax is, or has become, insufficient, or
any relief that has been given is, or has become, excessive.

If a taxpayer has submitted a tax return, HMRC's power to make a discovery assessment is restricted by sections 29(2) and 29(3) TMA. In the present case, only section 29(3) was relevant. Section 29(3) prevents an assessment unless one of the following applies:

the under-assessment is attributable to fraudulent or negligent conduct by the taxpayer or a person acting on his behalf (section 29(4) TMA);2 or
based on information available to him, an HMRC officer could not reasonably have been expected to be aware of the situation mentioned in section 29(1) of TMA 1970 when he notified the taxpayer that he had completed his enquiries into the return in question; or the period for notifying an intention to begin an enquiry expired (section 29(5) TMA).

Under section 29(6) TMA, information is made available to an HMRC officer for the purposes of section 29(5) TMA if it is:

contained in the taxpayer's return for the relevant tax year, or in any accounts, statements or documents accompanying the return, or
contained in any claim for the relevant tax year by the taxpayer acting in the same capacity as that in which he made the return, or in any accounts, statements or documents accompanying any such claim, or
contained in any documents, accounts or particulars which, for the purposes of any enquiries into the return or any such claim by an HMRC officer, the taxpayer produces or provides to the officer, or
information the existence of which, and the relevance of which as regards the situation mentioned in section 29(1) TMA, an HMRC officer could reasonably be expected to infer from information falling within the first three categories above; or the taxpayer notifies in writing to an HMRC officer.

**snowfall** · 12 December 2015, 15:19

Originally posted by LandRover View Post

Discovery is what HMRC are using on many of us.

Yes its a discovery notice, here are some guidelines

The letter does not quote Section 29 anywhere. It only states it is being raised under Section 9A.

It specifically states this is for an enquiry. There is no assessment included. I am just surprised they are quoting Section 9A when the handbook suggests it would be invalid to use Section 9A.

**webberg** · 13 December 2015, 11:33

Originally posted by snowfall View Post

The letter does not quote Section 29 anywhere. It only states it is being raised under Section 9A.

It specifically states this is for an enquiry. There is no assessment included. I am just surprised they are quoting Section 9A when the handbook suggests it would be invalid to use Section 9A.

On the facts given, HMRC is too late to open a section 9A enquiry.

As has been suggested write back with the analysis you have above and ask them to withdraw the notice.

Most likely next stage for HMRC is to try a discovery assessment. That's a complex subject.

If you do get such a notice, then appeal BOTH quantum and fact of discovery and ask for the tax to be postponed. Appeal and postponement will be accepted.

However, you will get an APN (if the scheme is a DOTAS variant) and will have to pay the tax in due course.

Note that a Judicial review may delay the tax due and (in my opinion) has a faint chance of a significant delay if the rules are found to be invalid. A representation will also delay the tax due. The cost of each action for the same outcome is the difference.

**BrilloPad** · 13 December 2015, 12:38

Originally posted by LandRover View Post

Discovery is what HMRC are using on many of us.

Yes its a discovery notice, here are some guidelines

Under section 9A TMA, HMRC may enquire into a taxpayer's self assessment return if they notify the taxpayer of their intention to do so:

up to the end of the period of 12 months after the day on which the return was delivered if the return was delivered on or before the filing date;
up to and including the quarter day next following the first anniversary of the day on which the return was delivered if the return was delivered after the filing date;
up to and including the quarter day next following the first anniversary of the day on which the amendment was made if the return was amended.

However, under section 29(1) TMA, HMRC can make an assessment to make good a loss of tax if they 'discover' that there has been an under-assessment because:
any income or chargeable gain that ought to have been assessed to tax has not been assessed, or

an assessment to tax is, or has become, insufficient, or
any relief that has been given is, or has become, excessive.

If a taxpayer has submitted a tax return, HMRC's power to make a discovery assessment is restricted by sections 29(2) and 29(3) TMA. In the present case, only section 29(3) was relevant. Section 29(3) prevents an assessment unless one of the following applies:

the under-assessment is attributable to fraudulent or negligent conduct by the taxpayer or a person acting on his behalf (section 29(4) TMA);2 or
based on information available to him, an HMRC officer could not reasonably have been expected to be aware of the situation mentioned in section 29(1) of TMA 1970 when he notified the taxpayer that he had completed his enquiries into the return in question; or the period for notifying an intention to begin an enquiry expired (section 29(5) TMA).

Under section 29(6) TMA, information is made available to an HMRC officer for the purposes of section 29(5) TMA if it is:

contained in the taxpayer's return for the relevant tax year, or in any accounts, statements or documents accompanying the return, or
contained in any claim for the relevant tax year by the taxpayer acting in the same capacity as that in which he made the return, or in any accounts, statements or documents accompanying any such claim, or
contained in any documents, accounts or particulars which, for the purposes of any enquiries into the return or any such claim by an HMRC officer, the taxpayer produces or provides to the officer, or
information the existence of which, and the relevance of which as regards the situation mentioned in section 29(1) TMA, an HMRC officer could reasonably be expected to infer from information falling within the first three categories above; or the taxpayer notifies in writing to an HMRC officer.

Does that mean HMRC are right or wrong?

**snowfall** · 13 December 2015, 17:22

Thank you - I appreciate all of the replies, and plan to reply to the notice with the points raised.

**LandRover** · 13 December 2015, 20:01

Originally posted by BrilloPad View Post

Does that mean HMRC are right or wrong?

They are wrong, however the use of Discovery by HMRC is abused and Fisher is the case that we should keep a keen eye in here

Blog extract here

"The taxpayers also made a claim that HMRC’s assessments were not valid, under the discovery provisions in TMA 1970, s 29, as the tax officer should have been aware of the relevant information as a result of responses to their enquiries. The tribunal agreed that the conditions for making a discovery assessment were not satisfied for 2005/06 and 2006/07. The appeals for the remaining years were dismissed."

Webberg did post on this a while back here

**EBTContractor** · 7 September 2017, 22:35

What was the outcome of this?

Section 9A Enquiry can be opened outside 12 month enquiry limit?