Is HMRC too late to enquire?

Self-assessment enquiries

The taxpayer in question has completed a self-assessment tax return every year since the system was introduced in 1995. For the first time he’s received a letter from HMRC challenging the figures, not on his most recent tax return, but the one before. He thought that tax year was a closed matter. A quick check of HMRC guidance seems to confirm this. But what does the legislation?

What’s the deadline?

HMRC can start a partial or full enquiry into a tax return at any time after the individual submitted the completed form until the enquiry deadline passes. For personal self-assessment returns the deadline for a notice of enquiry is twelve months after the date it received the completed tax return, unless the individual wasn’t required to submit the return until after the normal filing date.

Normal filing date

The normal filing deadline for a self-assessment return is 31 January following the end of the tax year to which the return relates. For example, for a 2018/19 tax return submitted no later than 31 January 2020 the enquiry deadline is 31 January 2021.

If HMRC’s enquiry notice is dated before the enquiry deadline but it isn't received until after, the notice is not valid. In this situation the individual should contact HMRC, preferably by phone, and say the notice arrived late. They should follow up the call with a letter confirming this, ideally sent the same day as the call. The sooner sction is taken, the more likely it is that HMRC will accept that the notice was late. If the business has third party evidence that the notice was late, say a friend or colleague was present when HMRC’s letter arrived, they could ask them to make a written statement to that effect.

If HMRC received a completed return after the normal filing date (this might be because it was sent late or because HMRC was late asking for a return), the enquiry deadline is the next quarter-end day following the first anniversary of the day it received it. The quarter days are 31 January, 30 April, 31 July and 31 October. For example, if a 2018/19 return was received by HMRC on 1 June 2020 HMRC has until 31 July 2021 to start an enquiry into the return.

If a return is amended after submission, the enquiry deadline can be later than had the individual not made the amendment. However, if the deadline is extended HMRC can only make enquiries in the extra time in respect to the amended figures and not other aspects of the original return.

Amended deadline

The enquiry deadline for the amendment is up to the quarter day next, following the first anniversary of the date that the amendment was made. For example, Aziz’s 2018/19 return was received by HMRC on 31 January 2020. He has until 31 January 2021 to amend it. If he amended it on 2 January 2021, the last date for giving a notice of intention to enquire into the amendment is 31 January 2022.

If an amendment to a tax return is needed, the individual should do it as soon as possible to prevent the enquiry deadline being extended.