New compliance checks
HMRC have issued three separate news releases to underline the importance of the new rules for compliance checks which come into effect from 1 April 2009. The news releases were aimed at businesses, agents and charities.
From 1 April 2009 one set of rules and powers will apply to HMRC compliance checks (also known as enquiries, visits and inspections) across a range of taxes including Corporation Tax, Income Tax, Capital Gains Tax, PAYE, VAT and the Construction Industry Scheme.
The legislation makes a number of significant changes to the way HMRC must carry out compliance checks. These changes include the introduction of a new four-year time limit for assessments and claims – a reduction from six years for Income Tax, Capital Gains Tax and Corporation Tax and an increase from three years for VAT. These time limits will not be fully in force for most taxpayers until 1 April 2010. There will be transitional arrangements from 1 April 2009.
Other changes include:
– A reduction in extended assessment time limits
– Streamlining the process for closing Corporation Tax assessments
– A new statutory ban on inspecting purely private dwellings without consent
– A statutory requirement for HMRC to give at least seven days notice of a visit unless an unannounced visit is necessary or a shorter notice period is agreed
– From 1 April 2009 unannounced visits must be approved in advance by a specially trained HMRC officer
– A statutory requirement on HMRC to act reasonably