Taxpayers left waiting 20% longer for the result of an HMRC tax inquiry
Are you waiting for the outcome of a tax inquiry? Well, you’re in for an even longer wait than you might have anticipated.
PFP, an insurance company, submitted a freedom of information act request to find out exactly how long tax inquiries now take. The results are cause for concern. In 2012-13 you would have waited 10 weeks for a resolution, now it’s up to 3 full months – an increase of 20% waiting time. PFP recognise that such financial inquiries are “disruptive, distressing and costly” to the tax payer and could take much longer than 12 weeks to be concluded.
HMRC’s ‘compliance teams’ investigate taxpayers that they suspect have not fully declared all profit or income. The extended waiting time is stressful to the taxpayer because of the potential consequences of the initial inquiry. It could trigger a full tax investigation which involves HMRC going through a taxpayer’s financial past with a fine-toothed comb in order to ascertain whether they have paid the correct amount of tax. And if you haven’t – there’s a bill for the difference.
Do you know how much data HMRC has access to?
The Tax Office want to see if your declared income and profits marry up with your spending lifestyle and savings – any obvious discrepancies lead to alarm bells. HMRC can legitimately access a vast array of different information from both private and public records including, but not exclusively;
- DVLA
- Hospitals
- Insurers
- Banks
- Local councils
- Online buying and selling on trading and auction sites
- Social media
If you are sharing photos of designer purchases, fancy holidays or a new car on Facebook – remember that HMRC can see them as well as your ‘friends’. They can legitimately use this as evidence to show your spending doesn’t match your declared income. Amazon Marketplace and eBay are just two examples of trading sites that are carefully watched by HMRC to identify other undeclared income or profits.
New rules state that HMRC can ask for payment of tax within 90 days, and they are authorised to issue charges and penalties if they suspect exploitation of the tax allowances system. The onus is then put on the taxpayer to take HMRC to court to prove they have made a mistake. If the court rules in their favour, HMRC must repay the money taken.
