Formal or informal?
When you receive an enquiry from HMRC about your tax affairs it should be a cause for concern, but can you tell whether the HMRC letter is announcing the opening of a formal tax investigation?
HMRC should say it is using its powers of enquiry by saying something like: “this is a notice to provide information under Paragraph 1 of Schedule 36 of the Finance Act 2008”.
There are strict rules about when such information notices can be issued, who can be asked to provide tax information, when tax inspections can be carried out, and what penalties can be imposed.
Recently HMRC have been approaching taxpayers asking about tax returns which are now outside of the period in which a formal tax enquiry can be opened – a sort of informal enquiry. Those letters have been sent to a range of taxpayers from the wealthy to the low-paid. If you receive such a letter, contact us immediately, so we can rebut any unlawful requests for information.