Opening letter to a compliance check

By Tolley

The following Corporation Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Opening letter to a compliance check
  • The format of the opening letter
  • Nature of information requested
  • Formal information request
  • Appealing against the information request
  • Failure to comply with the information request

The format of the opening letter

When HMRC issues a notice that it is checking a return, the opening letter will invariably request information and documents. The opening letter issued under FA 1998, Sch 18, para 24 (for companies) is sent to the directors, with a copy to the agent if the company is represented. These letters will often be different in tone and content.

The opening letter to the agent will usually encourage an early phone call to discuss the check and enclose an information sheet asking about computer based records. The opening letter to the taxpayer will not mention any of this but does explain what happens when the check has been completed. The format of the letter to the agent is typically a notification of the check followed by details of why the check is being made.

Tax adviser’s notification

Unless the check is informal, the opening section of the letter will advise which return period the check applies to and the statutory basis for the check.

It is important for the adviser to make sure that the statutory basis used and the return period that HMRC is checking is valid and that it is within the appropriate time limits. Brief discussion of the normal time limits and legislative framework for checking returns is included in the Types of checks on returns guidance note. The HMRC’s powers to open an enquiry into a return guidance note includes further discussion of HMRC’s powers.

Why I am checking the return?

The letter will then normally advise why the check is being made stating, for example, that a chargeable gains calculation is being checked.

The letter might also say that the HMRC officer would like to talk to the adviser on the telephone to speed up the process. An

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