Section 11 - Enquiry letters
Published 23 April 2020
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This publication is available at https://www.gov.uk/government/publications/independent-loan-charge-review-summary-of-evidence/section-11-enquiry-letters
Enquiry letters are sent to individuals to notify them that HMRC has formally opened an investigation into their tax affairs.
Caseworkers across HMRC have access to the current versions of enquiry letters and notices from a central database.
There are different versions available depending on whether;
- the customer has an authorised agent or not;
- the compliance check will include a visit or not; or
- the compliance check is into something other than a tax return, such as a claim (not typically a feature of those involved in DR schemes).
However, that database does not store previous iterations to prevent caseworkers using letters and notices that have been superseded. We are aware there have been minor changes to the form and wording of enquiry letters since 1999. For example, HMRC’s enquiries have also been referred to as investigations, compliance checks or, simply, checks. They will also have changed over time to reflect HMRC’s change in tone to be more user friendly.
To demonstrate how the compliance check notices have changed over time and how they are used in real life examples of DR schemes, we have attached anonymised copies of enquiry notices issued to DR scheme users.
These cover five different DR schemes covering tax years 2005 to 2006 to 2016 to 2017 with the exception of 2006 to 2007. These enquiry notices are not necessarily reflective of all enquiry notices issued across the over 250 different DR schemes over time. However, we expect the vast majority of opening letters to follow these stencils, in particular for more recent years as HMRC has relied more on standardised letters. There will be a minority of cases where the caseworker drafted a bespoke enquiry letter. In all cases, we would have expected the reason and the purpose of the enquiry to have been clear.
In each notice the specific year of the tax return being enquired into is set out and the majority of the notices specify the legislative basis of the enquiry, such as section 9A Taxes Management Act 1970.
The focus of an enquiry is highlighted to the individual. For example, ‘my enquiry is concerned with employment income and benefits provided to you’. Some letters request documents and information, others indicate that no further information is being requested at that time. The latter type of enquiries are opened to ensure that any adjustments arising from our wider investigations of the scheme and a sample of users, can be reflected in an amendment of the customer’s Self Assessment return at a later date.
Go to section 12: Settlement opportunities.