HMRC have announced a pilot for a new system for SME enquiries. The Single Compliance Process (SCP). The pilot will run from June 2011 to December 2011 from 12 locations.
The SCP sounds initially familiar as it consists of elements already piloted over the last few years. These include:
- Commencement of a review using risk analysis and intelligence, followed by:
- A desk audit (use of telephone to obtain information) and then depending on what has been uncovered a single or cross tax enquiry.
The major difference in the new approach from previous enquiry pilots appears to be seeking to include agents’ collaboration into the enquiry process, so that there should be “no surprises”. Most agents will welcome these sound bites.
There is more new language – the SCP is geared towards risks and “behaviours”, this of course ties into the tax penalty regime.
HMRC say that they are also intending to make better use of sampling in an effort to avoid costly fishing expeditions.
Finally, they intend to work to their Litigation and Settlement Strategy principles so they will not open a dispute unless it is cost effective to do so.
HMRC says that the SCP will work on four different levels of intensity proportionate to risk:
- "The first level will be to carry out an enquiry where there is no need for a face-to-face meeting, for example by correspondence, and with minimum inconvenience.
- The second level will adopt a simplified and faster route for those cases where a lower intensity face-to-face intervention approach is required.
- The third level will address cases requiring a greater amount of time because the depth and breadth of the enquiry is more involved.
- The fourth level will tackle the most demanding cases such as those indicating tax evasion characteristics or those highly complex in nature.
All levels can apply to all taxes and types of cases and can be moved between levels."
HMRC estimates that a maximum time to work each enquiry at each level during the pilot will be as follows:
Level 1 - 1.5 days
Level 2 - 2 days
Level 3 - 4 days
Level 4 - 8 days
Where?
- Belfast
- Cardiff
- Edinburgh/Dundee
- Euston Tower, London
- Exeter
- Newcastle
- Reading/Slough
- Southampton
- Warrington
- York
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