How to survive self-assessment

Revenue staff can get tough, so be ready for an inquiry, says Liz Loxton

As we enter the third year of self-assessment, experts are cautiously suggesting that taxpayers are finally getting to grips with it. Revenue errors still occur but less frequently.

The basic idea behind self-assessment is to streamline the processing of returns by encouraging taxpayers to work out their own tax liability. The onus is firmly on the individual to provide all the information relevant to that calculation.

But inevitably, both the calculations and the data on which they are based come under scrutiny by Revenue staff. This means that more taxpayers come into contact with the Revenue's inquiry machine.

So what happens if you are subject to an inquiry? There are three types: a random inquiry, an aspect inquiry and a full inquiry. Some 10,000 random inquiries are carried out each year. Aspect inquiries are usually quite minor and easily settled. You may be requested to produce a marriage certificate, for example, to prove that you got married in a particular year. But a full inquiry is a more serious affair. It allows tax inspectors to look into all the entries on your tax return and to request further documentation. They may also want to interview you.

The Revenue's first step is to send a formal letter to the taxpayer, notifying him or her that the return is under inquiry. It is not allowed to request information (except in limited circumstances) before announcing its intention to carry out an inquiry. The next step is to request further documentation. Perhaps the most unsettling aspect of the full inquiry is the fact that the Revenue does not have to give a reason why it is looking into a return. If you receive a request for information that looks irrelevant to your return, you or your accountant can ask the inspector to explain why it is needed. If you still cannot agree over the relevance of this information, you can ask the inspector to issue a formal notice, which you can then appeal against through the General Commissioners.

The inspector will then request an interview with you. You do not have to comply with this request, but it may be advisable to do so. Francesca Lagerberg, senior tax manager at the Institute of Chartered Accountants' tax faculty, says that taxpayers should beware unreasonable requests.

"There is no statutory right of the Revenue to insist on an interview," she says. "It can be a good way of proceeding, but sometimes it may be better to ask for questions in writing and to give a considered response."

If you have been handling the inquiry yourself, this may be a good time to find an accountant. Richard Murphy, partner with Murphy Deeks Nolan, says that an accountant can warn clients of the questions they will be asked, and ensure they are fairly put.

Above all, remember to file your return on time. If you intend to file in January, do not leave it until the last week (see below). Rumours persist that late filers are more likely to be subject to an inquiry than other taxpayers.

Liz Loxton is features editor of 'Accountancy Age'.

USEFUL CONTACTS

To find an accountant or tax adviser in your area, call the Practitioner Bureau at the Institute of Chartered Accountants of England & Wales on 01908 248090; the Chartered Institute of Taxation on 0171-235 9381 (www.tax.org.uk); or the Association of Chartered Certified Accountants on 0171-396 5900.

You can request a copy of the Inland Revenue Code of Practice from your local tax office. The Inland Revenue Self Assessment website (www.inlandrevenue.gov.uk/sa/index2.htm) provides a guide to procedures and also includes an exhaustive list of frequently asked questions.

Sport
Brazilian fans watch the match for third place between Brazil and Netherlands
world cup 2014Brazil 0 Netherlands 3: Dutch pile on the misery in third place playoff
Sport
Robin van Persie hands his third-place medal to a supporter
Van Persie gives bronze medal to eccentric fan moments after being handed it by Blatter
News
Ian Thorpe had Rio 2016 in his sights
people
Life and Style
Swimsuit, £245, by Agent Provocateur
fashion

Diving in at the deep end is no excuse for shirking the style stakes

PROMOTED VIDEO
News
scienceScientists have developed a material so dark you can't see it...
News
Monkey business: Serkis is the king of the non-human character performance
peopleFirst Gollum, then King Kong - now the actor is swinging through trees in Dawn of the Planet of the Apes
Arts and Entertainment
Blackman: Landscape of children’s literature does not reflect the cultural diversity of young people
booksMalorie Blackman appeals for a better ethnic mix of authors and characters and the illustrator Quentin Blake comes to the rescue
Voices
Mrs Brown's Boy: D'Movie has been a huge commercial success
voicesWhen it comes to national stereotyping, the Irish know it can pay to play up to outsiders' expectations, says DJ Taylor
Arts and Entertainment
Curtain calls: Madani Younis
theatreMadani Younis wants the neighbourhood to follow his work as closely as his audiences do
Life and Style
Douglas McMaster says the food industry is ‘traumatised’
food + drinkSilo in Brighton will have just six staple dishes on the menu every day, including one meat option, one fish, one vegan, and one 'wild card'
Life and Style
Once a month, waistline watcher Suran steps into a 3D body scanner that maps his body shape and records measurements with pinpoint accuracy
techFrom heart rates to happiness, there is little this fast-growing, self-tracking community won't monitor
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Sport
Mario Balotelli, Divock Origi, Loic Remy, Wilfried Bony and Karim Benzema
transfersBony, Benzema and the other transfer targets
News
Soft power: Matthew Barzun
peopleThe US Ambassador to London, Matthew Barzun, holds 'jeans and beer' gigs at his official residence. He says it's all part of the job
Sport
Joe Root and James Anderson celebrate their record-beaking partnership
cricketEngland's last-wicket stand against India rewrites the history books
News
Gavin Maxwell in Sandaig with one of his pet otters
peopleWas the otter man the wildlife champion he appeared to be?
News
Rowsell says: 'Wearing wigs is a way of looking normal. I pick a style and colour and stick to it because I don't want to keep wearing different styles'
peopleThe World Champion cyclist Joanna Rowsell on breaking her collarbone, shattering her teeth - and dealing with alopecia
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Information Security Manager (ISO 27001, Accreditation, ITIL)

£70000 per annum: Harrington Starr: Information Security Manager (ISO 27001, A...

Biztalk - outstanding opportunity

£75000 - £85000 per annum + ex bens: Deerfoot IT Resources Limited: Biztalk Te...

Trade Desk Specialist (FIX, Linux, Windows, Network Security)

£60000 per annum: Harrington Starr: Trade Desk Specialist (FIX, Linux, Windows...

Service Desk Analyst (Windows, Active Directory, ITIL, Reuter)

£35000 per annum: Harrington Starr: Service Desk Analyst (Windows, Active Dire...

Day In a Page

Iraq crisis: How Saudi Arabia helped Isis take over the north of the country

How Saudi Arabia helped Isis take over northern Iraq

A speech by an ex-MI6 boss hints at a plan going back over a decade. In some areas, being Shia is akin to being a Jew in Nazi Germany, says Patrick Cockburn
The evolution of Andy Serkis: First Gollum, then King Kong - now the actor is swinging through the trees in Dawn of the Planet of the Apes

The evolution of Andy Serkis

First Gollum, then King Kong - now the actor is swinging through the trees in Dawn of the Planet of the Apes
You thought 'Benefits Street' was controversial: Follow-up documentary 'Immigrant Street' has got locals worried

You thought 'Benefits Street' was controversial...

Follow-up documentary 'Immigrant Street' has got locals worried
Refugee children from Central America let down by Washington's high ideals

Refugee children let down by Washington's high ideals

Democrats and Republicans refuse to set aside their differences to cope with the influx of desperate Central Americas, says Rupert Cornwell
Children's books are too white, says Laureate

Children's books are too white, says Laureate

Malorie Blackman appeals for a better ethnic mix of authors and characters and the illustrator Quentin Blake comes to the rescue
Blackest is the new black: Scientists have developed a material so dark that you can't see it...

Blackest is the new black

Scientists have developed a material so dark that you can't see it...
Matthew Barzun: America's diplomatic dude

Matthew Barzun: America's diplomatic dude

The US Ambassador to London holds 'jeans and beer' gigs at his official residence – it's all part of the job, he tells Chris Green
Meet the Quantified Selfers: From heart rates to happiness, there is little this fast-growing, self-tracking community won't monitor

Meet the 'Quantified Selfers'

From heart rates to happiness, there is little this fast-growing, self-tracking community won't monitor
Madani Younis: Five-star reviews are just the opening act for British theatre's first non-white artistic director

Five-star reviews are just the opening act for British theatre's first non-white artistic director

Madani Younis wants the neighbourhood to follow his work as closely as his audiences do
Mrs Brown and her boys: are they having a laugh?

Mrs Brown and her boys: are they having a laugh?

When it comes to national stereotyping, the Irish – among others – know it can pay to play up to outsiders' expectations, says DJ Taylor
Gavin Maxwell's bitter legacy: Was the otter man the wildlife champion he appeared to be?

Otter man Gavin Maxwell's bitter legacy

The aristocrat's eccentric devotion to his pets inspired a generation. But our greatest living nature writer believes his legacy has been quite toxic
Joanna Rowsell: The World Champion cyclist on breaking her collarbone, shattering her teeth - and dealing with alopecia

Joanna Rowsell: 'I wear my wig to look normal'

The World Champion cyclist on breaking her collarbone, shattering her teeth - and dealing with alopecia
Bill Granger recipes: Our chef gives raw ingredients a lift with his quick marinades

Bill Granger's quick and delicious marinades

Our chef's marinades are great for weekend barbecuing, but are also a delicious way of injecting flavour into, and breaking the monotony of, weekday meals
Germany vs Argentina World Cup 2014 preview: Why Brazilians don't love their neighbours Argentina any more

Anyone but Argentina – why Brazilians don’t love their neighbours any more

The hosts will be supporting Germany in today's World Cup final, reports Alex Bellos
The Open 2014: Time again to ask that major question - can Lee Westwood win at last?

The Open 2014

Time again to ask that major question - can Lee Westwood win at last?