Role of the adviser during the Single Compliance Process (SCP)

By Tolley in association with Guy Smith of inTAX Ltd
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The following Owner-Managed Businesses guidance note by Tolley in association with Guy Smith of inTAX Ltd provides comprehensive and up to date tax information covering:

  • Role of the adviser during the Single Compliance Process (SCP)
  • Beginning ― the opening letter and preparing to respond
  • Middle ― responding to the letter and holding a meeting
  • End ― conclusion of the check
  • Going forward

The SCP framework is designed to handle small and medium enquiry work for both direct and indirect taxes. The process is risk and behaviour driven, with HMRC devoting more time and effort, or ‘intensity’, to highest risk cases.

More information on the risk and behaviour assessment can be found in the What is the Single Compliance Process? guidance note.

Once HMRC has undertaken the risk and behaviour assessment and decided how much intensity it intends to devote to the check, the enquiry is allocated to one of four levels depending upon the level of risk. The enquiry moves up and down the fluid four-level system as the risk and behaviour assessment is addressed. At no point is the business entity or appointed tax adviser told which level the check has been allocated to. HMRC regards the four-level system as a management tool, not a ‘badge of risk’. More information on the four-level system can be found in the Four levels of the Single Compliance Process (SCP) guidance note.

The role of the adviser is pivotal during enquiry, or ‘check’ work conducted by HMRC. The adviser needs to act as a bridge between the client and HMRC officer at all three key stages of a check, ensuring that the officer acts in accordance with tax legislation and prevailing practice, whilst at the same time, guiding the client through the SCP until the check is concluded in the most favourable terms possible.

The three key stages are probably best summarised as the beginning, middle and end.

Beginning ― the opening letter and preparing to respond

The starting point is to analyse the opening letter to make sure it constitutes a valid enquiry notice and has been issued in time. More information on the time limits can be found in the HMRC’s powers to open an enquiry into a return guidance note.

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