For many taxpayers, a brown envelope from HMRC will not be well received at any time of the year. Odds on it will contain bad news. It may be the start of an investigation. It may be a “nudge letter” or a “Check on tax position“. It almost certainly won’t be a Christmas card!
Is it deliberate or just a question of bad timing?
HMRC (and taxpayers) are bound by tax law. Under tax law HMRC has an enquiry window of 12 months from the date that a Tax Return is submitted to open an enquiry. So, if a taxpayer leaves it until 31 January to submit their Tax Return, then HMRC has until the following 31 January to open an enquiry.
Added to which, HMRC deployed a lot of their staff to help out with supporting the government’s response to the pandemic. These people are now getting back to their desks and are tasked with having to catch up on the investigations that were never started.
And then there are the “nudge letters”. HMRC receives information under the Common Reporting Standard (CRS). Whilst this is done annually and by 31 May, there were no staff at HMRC to send out the letters that were based on CRS, even though the data may have already been processed by Connect.
Responding to HMRC
It has long been established that there is a 30-day turnaround on letters between HMRC and either taxpayers and/or their agents. Most letters from HMRC will sign off with a date by which HMRC expect a response. The 30 days is not set under any tax law (unless the letter is issued specifically under Schedule 36 Finance Act 2008).
Responding to HMRC within 30 days (i.e. in January) may be a tall order if the taxpayer has not already submitted their Tax Return. Not forgetting Christmas itself.
So is it deliberate on the part of HMRC?
There is no doubt in my mind that HMRC could allow for more time to expect a response than just the “expected” 30 calendar days. But then HMRC have got a lot of catching up to do.
Arguably if HMRC had not been redeployed or able to return to their desks in say August or September 2021, we could have avoided this situation.
But then taxpayers could have submitted their Tax Returns earlier.
So who is to blame?
No-one. It should not be a blame game anyway. We are all busy people.
But a bit of foresight, planning and consideration will always go a long way to foster better relationships.
If you feel the relationship with HMRC has broken down or is waning or was never there in the first place, please give me a call and we can see what can be done.
Don’t let a letter from HMRC spoil your Christmas!