Valid notice of enquiry

Question.

I recently moved to a new house and changed tax advisors. HMRC have sent a notice of enquiry to my old address and my previous tax adviser. As the enquiry was not sent to my current address or my current tax adviser, is it possible that the enquiry could be cancelled?

Answer.

A notice of enquiry is a notice from HMRC outlining their intention to enquire into your tax affairs. Legislation is clear that the notice of enquiry must be made to the taxpayer themselves. Where, however, you have changed address and not notified HMRC, then a valid notice of enquiry can be made to your last known address.

HMRC follow clear guidelines where postal notices are concerned. First class post is assumed to take two days and second-class post is assumed to take four days. Notices close to a deadline should be sent via “track and trace” per HMRC’s own guidance. The time limit for receiving a valid notice of enquiry is up to the end of a twelve-month period after the day on which the return in question was delivered. If the notice of enquiry relates to your personal tax affairs for the year to April 2018 and you filed this return on 1 January 2019, then a valid notice can be issued up until 1 January 2020 i.e. 12 months from the date you filed the return.

Case law is still evolving in the area of notices served to incorrect addresses. Revell v HMRC established that an administrative error could lead to a tax return escaping enquiry. Where HMRC have failed to follow their own guidance in issuing the notice your position will be strengthened.

In order to conclusively respond to your query, it is necessary to establish the full circumstances of the notice of enquiry and decide whether there is scope to have the enquiry closed or whether the notice is indeed valid. The relevant factors to be considered are how did you initially notify HMRC of your change in address and your move to a new tax agent? Can you prove that you posted/emailed this to HMRC? Has HMRC amended their records accordingly? Where you can prove you followed procedures to notify HMRC of your change in circumstances you have a strong case to challenge this enquiry if the notice was initially sent the incorrect address and subsequently reached you after the twelve-month period following the filing date had elapsed.  

The advice above is specific to the facts surrounding the questions posed.  Neither PKF-FPM nor the contributors accept any liability for any direct or indirect loss arising from any reliance placed on replies.

Get in touch with Mairead McParland via email m.mcparland@pkffpm.com