Compliance Strategy: Definition of Full and Discrepancy Tax Credit Examinations/Enquiries
As with all compliance work, the extent and depth of a tax credit examination or enquiry will depend on the nature of the case and the issues involved. The terms “full” and “aspect” are used in HMRC compliance work to classify enquiries according to their depth and impact.
Full enquiries involve a searching exploration of the areas which are fundamental to the integrity of the return or claim, and often require face to face contact. By comparison, aspect enquiries are usually relatively straightforward, concentrating on a limited number of issues, and can normally be carried out by correspondence.
The term “full” is also used to classify appropriate tax credit enquiries and examinations. But the tax credit equivalent of “aspect” enquiries are classified as Discrepancy Examinations and Enquiries. This is because the type of work which, in tax credits, is appropriate to the aspect approach, usually arises because of a discrepancy between the claim and other information held by HMRC. For example, the pay details provided to HMRC by an employer differ from those notified by the customer (the P14 mismatch cases).
The legal powers underpinning examinations are different from those which apply to enquiries (See CCM Chapter 4 - Opening the Examination CCM4090 and CCM4180). But there is no difference, in statutory terms, between discrepancy and full examinations, or discrepancy and full enquiries. They are simply departmental terms which acknowledge that these different types of Examinations and Enquiries, require different techniques and are governed by different Codes of Practice.