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Requests for Information
Requests for information from HMRC are usually in the form of a s.9a notice, a s.29 demand or a Schedule 36 notice. Each format carries different requirements. It is essential that the first thing you check is whether or not the notice has been issued validly as there are strict time frames around which these can be issued. We commonly see HMRC sending notice out of time and have successfully had them withdrawn as a result.
The focus of the enquiry is usually eliciting information, formally and informally, on the arrangements you have used. This can be in the form of a request for a completed tax return from a previous year, despite being advised this was not required at the time, through to an extensive list of questions covering matters and information that is probably not in the possession of contractors but sits with providers.
The threat implied in the request for a late return is that failure to comply may result in a 28C determination being made. This determination allows HMRC to enforce payment of tax that they consider, underpaid. This will be based on HMRC’s estimate, which is commonly incorrect. A determination cannot be appealed. Penalties for late filing of a return or at worst deliberate concealing of information from HMRC may also arise.
The potential ramifications for taxpayers who ignore the requests from HMRC are serious and in most instances, it is advisable that the notice is complied with. It is essential that any information provided is correct, complies with the request and is presented accurately if possible.
For many it is to be hoped that the scheme operator will be taking responsibility for responses. If this is the case, you should seek written confirmation that the provider and HMRC have agreed that this is appropriate that you are absolved from any requirement to respond. Do not assume that the provider will have informed HMRC of their scheme users, nor adopted any formal duty in this regard. If you have any doubt ask HMRC.
For those who have requests in respect of a scheme where the provider is no longer active, or you fear that the provider cannot be impartial, the responsibility lies upon the individual. Many of you will either not have the information requested and/or be unsure as to what could or should be supplied. Where the request is for a late return, we strongly recommend that you file a return by the deadline indicated or seek a written extension of that deadline. Ignoring the notice is not sensible.
An informal request for information carries less statutory weight but should be complied with (carefully) as far as possible. Where the provider is no longer active, complying in full could be difficult and there is generally no harm in responding with that answer.
To discuss further the intricacies of responding or potentially instructing WTT to manage the responses on your behalf please arrange a callback below.
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