Tax Enquiry Rethink Required

During this summer, HMRC began trialling the Single Compliance Process (SCP) for dealing with small and medium-sized businesses.

The 'SCP Briefing Paper for Tax Agents' sets out four types of tax enquiry and recommends a maximum time to finalise each enquiry type.


Level of Enquiry Estimated Time of Completion
1:  Face to face meeting unnecessary. Matter could be dealt with by correspondence and with minimum disruption. 1 ½ days
2:  Simplified & faster route for cases where a low key face to face meeting is required. 2 days
3:  Cases that require a greater amount of time because enquiry is more involved. 4 days
4:  Most demanding cases such as those displaying characteristics of tax evasion or those highly complex in nature. 8 days


The SCP is being trialled between June 2011 – March 2012 in the following 16 HMRC locations:

Group 1 Group 2 Group 3
Belfast Newcastle Worcester
Cardiff Reading/Slough Lincoln
Edinburgh/Dundee Southampton Ipswich
Euston Tower, London Warrington Tolworth
Exeter York  


Group 3 locations will be added from January 2012 and these will be used primarily for HMRC to test their internal implementation package.

During the trial phase, HMRC plan to take up 1,100 – 1,200 enquiries, typically VAT and PAYE, and it maybe that agents and their clients are approached using this new framework.  

The guidelines are designed to reduce the burden on small and medium-sized businesses and to make HMRC more efficient. Whilst tax experts welcome these, many are concerned that some of the targets are unrealistic and make unfair demands on businesses and their tax advisors.

Whilst the aims of the guidelines are commendable, it may not be practical to expect tax advisors to answer HMRC enquiries within a few days, when currently tax enquiries take months to years to be resolved. HMRC has promised that its officers will be more open with businesses about the matters it is investigating which should help in reducing unnecessary delays but not bring matters to a conclusion within their proposed timescales.  

Should the trials prove successful, HMRC will roll out the process in May of next year as it currently has no legislative backing.

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