Be prepared for question time

In March of this year, HMRC concluded a pilot for its new Single Compliance Process (SCP) – a system designed to ensure that whenever a tax investigation takes place the parameters of the process are the same for every business.

It now seems likely that SCP will be with us shortly, and so you should be aware that a change has been announced regarding how the targeted businesses will be contacted in the first instance.

Previously the first contact occurred when HMRC approached a business directly and without warning – an action that naturally took the business by surprise, placing it an instant disadvantage, and perhaps equally naturally upsetting the firm’s accountants.

However, this ‘out of the blue’ approach has since been modified.

When HMRC decides to mount an investigation, it will now first write to the company, allowing a week for it to respond.

If the company does not reply within this period, HMRC will contact the company’s accountants by telephone within the following 14 days.

If, for any reason, the accountants do not reply, then the business will be questioned directly.

A week may not be sufficient time for a letter to penetrate the internal protocols of HMRC, and the deadline can easily pass while a busy CEO is concentrating on more important matters. If this should happen, HMRC should be contacted immediately.

Once an SCP investigation is confirmed, a business has just three weeks before HMRC expects it to answer questions.

Since an SCP can be instigated at random, the onus is clearly on the company to maintain up-to-date financial records.

All businesses are advised to contact their accountants as soon as they receive notification of an SCP; the evidence indicates that SCP investigations are more efficiently and equitably resolved when the firm’s accountants are involved from the very outset.

To find out more, call Lansdell & Rose on 020 7376 9333

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