Too late to start a tax enquiry?

Self-assessment enquiries

Our subscriber 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. Before pointing this out to HMRC he wanted to check the position with us.

What’s the deadline?

HMRC can start a partial or full enquiry into your tax return at any time after you’ve 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 your completed tax return, unless you weren’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.

Tip. If HMRC’s enquiry notice is dated before the enquiry deadline but you don’t receive it until after, the notice is not valid. In this situation you should contact HMRC, preferably by phone, and say the notice arrived late. You should follow up your call with a letter confirming this, ideally sent the same day as your call. The sooner you act the more likely it is that HMRC will accept that the notice was late. If you have third party evidence that the notice was late, say a friend or colleague was present when HMRC’s letter arrived, ask them to make a written statement to that effect.

Trap. If HMRC received your completed return after the normal filing date (this might be because you were late sending it or because HMRC was late asking you to complete 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 your 2018/19 return was received by HMRC on 1 June 2020 HMRC has until 31 July 2021 to start an enquiry into the return.

Trap. If you amend your tax return after submitting it, the enquiry deadline can be later than had you 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 your 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.

Tip. If you need to make an amendment to a tax return do it as soon as possible to prevent the enquiry deadline being extended.