Requests from HMRC

HMRC will commonly request information, formally and informally, on the arrangements used. This can come in the form of a request for a completed tax return for a previous year or 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 prediction, which, from past performance, is likely to be 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 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For those who have requests in respect of a scheme where the provider is no longer active, the responsibility lies upon the individual. Many 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 Where the provider is no longer active, complying in full could be difficult and there is generally no harm in responding with that answer.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 contact the team.

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