Commentary

A6.404 HMRC's power to enquire into a return and selection of cases for enquiry

Administration and compliance

A6.404 HMRC's power to enquire into a return and selection of cases for enquiry

A6.404 HMRC's power to enquire into a return and selection of cases for enquiry

HMRC has the statutory right to enquire into any return which the taxpayer has been required to deliver1, if formal notice of enquiry (see A6.405) is given to the taxpayer within the correct time limit (see A6.401)2. HMRC also has the statutory right to enquire into a voluntary or unsolicited return (see table below and A4.104B for more on voluntary returns)3.

HMRC's effort is concentrated on those areas where there is reason to doubt the accuracy of the return and consider that there is a risk of loss of tax. The vast majority of enquiries are therefore opened for cause.

HMRC is not required to state its grounds for opening an enquiry and it is its policy to not tell the taxpayer if the enquiry is a random one4. However HMRC also has an 'openness and early dialogue' policy which encourages communication with the taxpayer (see A6.405).

Case law: power to enquire

Case lawCommentary
The taxpayer does not have a right of appeal against a notice of an enquiry5.In Spring Capital Ltd6, the First-tier Tribunal upheld HMRC's view that there is no right of appeal against the issue of a notice opening an enquiry.
An enquiry notice did not need to be issued by an inspector, and a notice of enquiry could not be appealed.Note that there is no requirement in the legislation for an enquiry notice to be issued by an inspector (the legislation

To continue reading
View the latest version of this document, as well as thousands of others like it, sign in to TolleyLibrary or register for a free trial