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What goes around comes around?

21 November 2007
Issue: 4135 / Categories: Comment & Analysis , HMRC powers , Admin
MIKE DOWN and JULIE CAMERON consider HMRC's proposed attempts at encouraging 'openness and early dialogue in tax enquiries'


  • Information about why an enquiry has been opened would be helpful.
  • Under 'early dialogue' HMRC hope to set a timetable for the enquiry.
  • Is a meeting with the taxpayer really helpful in progressing an enquiry?
  • Flexibility will be important in operating the new approach.

Let's begin with a history lesson. Practitioners whose memories go back to before the start of the self assessment enquiry regime will recall the good old days when direct tax investigations were conducted in what was arguably a more open manner. When starting an investigation Inspectors would write to the agent explaining why cases had been selected.

The following were all well-known openings:

  • gross profit rate is lower than the industry average;
  • means appear insufficient to fund lifestyle;
     and the ubiquitous
  • ...

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