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HMRC takes longer to close enquiries

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Amount of time taxpayers have to wait for HMRC to close enquiries has increased by an average of 24% in the year to April 2016, according to City law firm RPC. Looking in particular at enquiries by HMRC’s charities, savings and international unit and pensions unit, taxpayers waited an average of 303 days for HMRC to close their enquiries.

Adam Craggs, partner at RPC, says: ‘HMRC has been accused of tactically wearing taxpayers down so as to avoid heading to the tax tribunal. The substantial increase in the number of open cases in the last year is arguably evidence of such a strategy, especially when considered together with HMRC's increased use of ‘nudge’ letters which are intended to persuade taxpayers to concede their dispute’.

The number of enquiry cases still open at the end of 2015/16 also seems to have risen sharply, with 4,011 enquiries conducted by the same HMRC units remaining open in the last year, up from 494 open enquiries in 2014/15. Taxpayers can seek to force HMRC to close an enquiry by applying to the tax tribunal for a direction. RPC expects this option to become more popular once the Finance Bill 2017 proposals permitting partial closure notices become law.

RPC also believe that advanced payment notices have also reduced the incentive for HMRC to bring an enquiry to a close, once taxpayers have paid the disputed tax.

Issue: 1342
Categories: News