If you receive a Tax Enquiry Notice take care to check that the Tax Inspector is not “out of time”. If he is then the Tax Enquiry Notice is possibly invalid and can be challenged. Or the Inspector is claiming there is careless, negligent or fraudulent conduct.
The so-called “Tax Enquiry Window” for Corporation Tax Self Assessment Returns has changed for returns covering Accounting Periods ending on or after 1st April 2008. This means that companies can get earlier certainty that the accounts have been accepted by HMRC; as long as the taxman doesn’t open a Tax Enquiry in the 12 months following submission. This is better than the old rules where a company could wait up to 2 years before feeling safe from a tax investigation.
The normal time limit for submitting a company Tax Return is 12 months following the end of the Accounting Period.
So, for Accounting Periods ending on 31st March 2008, the Filing Date in most cases would be 31st March 2009. Under the old rules HMRC could make an Enquiry into that CTSA Tax Return by 31st March 2010, even if was submitted 30th April 2008 (i.e. up to 2 years following the end of the Accounting Period).
The new rules mean that where a company submits its Corporation Tax Self Assessment Return before the statutory Filing Date, then HMRC will only have 12 months following the actual Date of Filing to open a Tax Enquiry. A company with an Accounting Period ending on 30th April 2008 that submitted its tax return by 31st May 2008, will have its Tax Enquiry Window closed on 31st May 2009 – rather than 30th April 2010. Unless it gets an enquiry notice before then, of course!
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