Assessment v Enquiry

[demby]

Hi

I'm just trawling through the mountain of correspondence I have received from HMRC

I have found a letter that lists 4 years - 2 have a Type = Enquiry the other 2 have Type = Assessement

Under a column headed "I would like to Settle my Appeal" - the 2 Enquires have "N/A" and the 2 Assessments "Yes / No"

Question is what is the difference between Enquiry and Assessment

Thanks

[DealorNoDeal]

HMRC only have a 12-month window to open an enquiry. Assessment (under discovery) is what they use if they miss that.

Assessments can be appealed. After opening an enquiry, HMRC should eventually issue a closure notice which can be appealed. Whilst an enquiry is still open, there is nothing to appeal.

[TheDogsNads]

HMRC may have a 12 month window to open an enquiry but they can and frequently do use 'discovery' to open investigations beyond this for cases of tax avoidance matters. They can use 'discovery' in a number of circumstances, not least an 'incomplete disclosure' by the taxpayer that is not due to carelessness or deliberate conduct.

Discovery Assessments: At a glance - RossMartin.co.uk

They frequently get away with doing it under the most tenuous of circumstances. You'd have to get an FTT to agree they'd overstepped the mark in using 'discovery.' Even then, depending on the case, HMRC could well take it to the UTT and beyond to cover their arse.

[webberg]

I'm afraid that some information above is incorrect.

Normally the process is:

Send HMRC a SATR
HMRC can raise an enquiry (section 9a) within 12 months of that submission
Information/views are exchanged between taxpayer and HMRC
HMRC reach a decision as to liability and issue a closure notice (section 28)
The closure notice explains (or should do) how HMRC has arrived at a decision on liability (if any)
You can appeal that closure notice and that goes to the First Tier Tribunal in the first instance


In the event that HMRC misses the enquiry deadline (which can in some instances be extended), or no SATR is submitted then often if HMRC comes into possession of information or knowledge that indicates you have more tax liability than has has been assessed, they can issue an assessment, usually called a discovery assessment - section 29.

You can appeal the assessment and ask for the tax to be postponed.

Eventaully however you have to either show that the assessment is incorrect - and that usually requires going to a Tribunal - or HMRC will withdraw it (unlikely unless they have transgressed the time limits).

HMRC has four years from the end of the tax year being assessed to raise an assessment.

Either way, if you are on HMRC's radar, you need to deal with the situation and hoping it will all go away is false.

[underthecosh]

Just dug it out to check but, I have a CoP 8 letter from 2007 (13 years ago) and have heard nothing since. Can I safely assume that all is well and the lack of some sort of conclusion confirmation is just a simple administrative oversight?

[webberg]

Just dug it out to check but, I have a CoP 8 letter from 2007 (13 years ago) and have heard nothing since. Can I safely assume that all is well and the lack of some sort of conclusion confirmation is just a simple administrative oversight?

Probably not.

HMRC will see a COP8 as opening an enquiry. If so, it can be closed ONLY by a closure notice.

Lack of action on either HMRC's part or yours, is not closing the enquiry.

[handyandy]

Probably not.

HMRC will see a COP8 as opening an enquiry. If so, it can be closed ONLY by a closure notice.

Lack of action on either HMRC's part or yours, is not closing the enquiry.

I have two years under a COP8 enquiry from the mid-2000's as well. No correspondence from HMRC at all except that they were requesting information from my 'employer' at the time and didn't;t need anything from me. I think there is a process you can follow to try to force HMRC to issue a closure notice but not sure of the details, effort/cost and the likely outcome (will they just throw whatever they have at you and try to make it stick).

[webberg]

I have two years under a COP8 enquiry from the mid-2000's as well. No correspondence from HMRC at all except that they were requesting information from my 'employer' at the time and didn't;t need anything from me. I think there is a process you can follow to try to force HMRC to issue a closure notice but not sure of the details, effort/cost and the likely outcome (will they just throw whatever they have at you and try to make it stick).

The enquiry/assessment process is as much in your control as HMRC's.

HMRC regularly opens enquiries, sends an initial letter and then silence. (The record in our books is 15 years and counting).

HMRC is NOT obliged to be active in pursuing enquiries (although this may be tested soon) and cannot close an enquiry without sending a notice of some sort.

That notice will either be "we have investigated and found no adjustment required" which I would call a section 54 notice.

Or, "we have investigated and you owe us more money the reason for which is detailed (or not usually) on the section 28 notice". This is a closure notice.

Challenging a closure notice is via the Tribunal. (Or you could agree with HMRC and pay the tax and interest).

In a Tribunal the parties are equal. YOU can bring proceedings there at ANY TIME. You may have to go several times if you want matters to move along but it can be and has been done.

HMRC is of course relying on taxpayers being scared of them or unaware of their rights and therefore not "poking the bear". One of the reasons you need some professional advice.

At the end of the day, once the enquiry is open, there is a route to closure as above.

Nothing else closes an enquiry.

[underthecosh]

Thanks Graham. I'm completely sure that I don't owe anything and your 'don't poke the bear' comment is precisely the reason for my approach. Doesn't the 20-year window not effectively close the enquiry too? Surely they can't come back on an open enquiry 30 years later and raise a tax bill? I forget, it's HMRC we're dealing with here.... /

[webberg]

Thanks Graham. I'm completely sure that I don't owe anything and your 'don't poke the bear' comment is precisely the reason for my approach. Doesn't the 20-year window not effectively close the enquiry too? Surely they can't come back on an open enquiry 30 years later and raise a tax bill? I forget, it's HMRC we're dealing with here.... /

There is no time limit on how long an enquiry can be open.