Reply to: HMRC self-assessment compliance check letter

[DZ2]

Spoke to QDOS and they will be dealing with this on my behalf. They also think it's just a routine random check from HMRC.

All in all I'm sold on keeping QDOS insurance running for few more years even though I'm not contracting any longer. They've been very helpful in past and now again

[sludgesurfer]

Oh no don't even mention option b!
Accountant thinks it's the case of random check and nothing to worry about.

I've e-mailed copy of the letter to QDOS, will see what they say.

I've had 4 of these from memory. 2 a while ago when I was a permie due to the high level of of foreign tax I was reclaiming. 2 more recently as LTD.

The first LTD one was due to me screwing up my VAT return when (based on incorrect advice from my accountant) I didn't include the sales amount for 'out of scope' VAT sales.
The second LTD one was due to me having 2 savings accounts with very similar names and only declaring one resulting in me under-declaring £400 of interest. This one made me realise that HMRC know everything.

The permie ones were the most onerous, requiring several requests for additional time as Deloitte chased down the Equatorial Guinean tax authorities for evidence of tax paid. Surprisingly not the most efficient of departments.

I didn't use insurance for either of the LTD ones although I did speak to the HMRC advisor dealing with the case directly. That, plus the compliance letter made it pretty obvious what thread they were pulling at, although I appreciate with hindsight, I may have been lucky/foolish.

One thing, once complete, ensure you get a closure notice. I had to chase this for the VAT one. If you handle this yourself, the compliance check should be declared to Qdos and they also asked for copies of the closure letter. After doing so, I received an e-mail back from Qdos confirming continued cover but not for anything related to these compliance checks.

[DZ2]

It's likely to be:

a) A random compliance check, nothing to worry about if your tax returns have been accurate or,
b) A pre-cursor to an IR35 investigation.

Either way, as others have said if you have any kind of tax compliance policy you should notify them immediately as well as your accountant and let them deal with it for you.

Oh no don't even mention option b!
Accountant thinks it's the case of random check and nothing to worry about.

I've e-mailed copy of the letter to QDOS, will see what they say.

[Lance]

I think this is bad advice, if you respond directly it might invalidate your cover from QDOS/IPSE - let them deal with it

"claims conditions" from QDOS policy wording:
Provided that Qdos has managed the dispute from inception

it's not a dispute yet. It's a compliance check.

Using your insurance is better idea. But doesn't make my suggestion a bad idea.

[TheCyclingProgrammer]

It's likely to be:

a) A random compliance check, nothing to worry about if your tax returns have been accurate or,
b) A pre-cursor to an IR35 investigation.

Either way, as others have said if you have any kind of tax compliance policy you should notify them immediately as well as your accountant and let them deal with it for you.

[ladymuck]

Oh look insurance was mentioned in post #2...

[GhostofTarbera]

I would be on a plane to Mexico if me


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[DZ2]

Do not contact them directly. Let your insurers manage this investigation.

A very good point, I didn't think of this. Will give QDOS a call today. I'd be more than happy if they take this out of my hands!

[wattaj]

Thanks, that's what I thought too. Pretty sure there is nothing for them to disagree, only income was from Ltd, no other sources.

Do not contact them directly. Let your insurers manage this investigation.

[wattaj]

I think this is bad advice, if you respond directly it might invalidate your cover from QDOS/IPSE - let them deal with it

^^ This.

[pr1]

just tell them the truth. Answer direct questions directly. No embellishments. Stick to facts.
Your only worry right now is if something you tell them doesn't agree with your tax return.

I think this is bad advice, if you respond directly it might invalidate your cover from QDOS/IPSE - let them deal with it

"claims conditions" from QDOS policy wording:
Provided that Qdos has managed the dispute from inception

[DZ2]

just tell them the truth. Answer direct questions directly. No embellishments. Stick to facts.
Your only worry right now is if something you tell them doesn't agree with your tax return.

Thanks, that's what I thought too. Pretty sure there is nothing for them to disagree, only income was from Ltd, no other sources.

[DZ2]

Do you have any investigation insurances with the likes of Qdos or IPSE? Check the policies and see if they will cover this.

Thanks, yes I have both. Will check them. I was wondering whether it's worth renewing when they expire now that I've left contracting. I guess that's a sign to do so

[Lance]

Just received said letter in the post and am having slight panic attack Has anyone dealt with this and any advice? Is this something routine HMRC do time from time to randomly selected accounts (especially now when they need to pay for Covid/Brexit etc.), or do I need to worry/make a run to Mexico?

They are looking into the year ending 5-Apr-2019 and asking to provide details of all bank accounts held in the UK or overseas, and details of remuneration and divs from my Ltd which seems straightforward enough.

My (now former) accountant is OOO today but of course I'll speak to him when he's back. I'm certain there was nothing dodgy going on, just usual salary + dividends taken from my Ltd where I was a director (company is now closed and I took permanent employment since). However I do feel a little uncomfortable.

Any words of wisdom much appreciated!

just tell them the truth. Answer direct questions directly. No embellishments. Stick to facts.
Your only worry right now is if something you tell them doesn't agree with your tax return.

[ladymuck]

Do you have any investigation insurances with the likes of Qdos or IPSE? Check the policies and see if they will cover this.