HMRC compliance check

[DraftUp]

I’ve been issued a self assessment compliance check even though I’m not self employed. I’ve sent in all details of earnings and bank statements and I know I’ve done nothing wrong. I do have quite a bit of savings. I have asked my husbands accountant to represent me, they think that it’s vindictive. I have put in some pretty heavy complaints to the LA around my disabled child. I’m feeling rather vulnerable. Does anyone know what I should I expect now? What time scale are we looking at?

Have you been selling lots on eBay or Vinted? HMRC are now getting access to information from these and may be doing fishing expeditions for people they think might be over the threshold for self assessment. Even if you have sold lots online, if they're your own possessions that you're selling it shouldn't cause an issue.

Chances are HMRC will just send you a letter saying thank you for the information and will close the review without doing anything further.

Their time for dealing with anything nowadays is ridiculous, so you may be waiting a while.

If you're happy you've done nothing wrong, I'd really try not to worry about it.

I'm really surprised an accountant thinks it is a vindictive move by HMRC in relation to your dealings with the LA. I would be highly doubtful that the HMRC would be investigating based on LA dealings with their clients... unless LA notified HMRC of some irregularities they discovered in your finances.

Could be lots of things.

If you gets lots of bank interest that is taxable maybe your bank reported you.

If you make money online maybe the online app reported you.

Are you in a higher tax bracket - above the 40% band ?

Why does an accountant think this is “vindictive?” Such an odd thing of them to say. No one likes a compliance check but they are not uncommon.

Banks and building society have to tell HMRC how much interest you earn each year. If you have quite a bit of savings then there is a chance you should have paid tax on those savings. I guarantee that’s why this is happening.

If your husband has an accountant I presume he has some sort of business, are you a director for tax purposes? That would be the other possible reason something arising from that.

I guarantee the LA has not dobbed you into HMRC. You can barely get departments to talk to each other in government departments let alone cross departmental cooperation. Why would either organisation waste time in this way?

In terms of what will happen it’s all set out below. Ultimately HMRC wants money, if you’ve not paid tax you should have you’ll have to pay and may get a penalty. If there is no tax to pay or you’ve underpaid then you’ll get repaid. If HMRC want to visit make sure you have accountant with you. Be honest and transparent.

https://www.gov.uk/tax-compliance-checks

I agree with PP that it will not be a vindictive check. HMRC carry out a number of random checks each year as well as checks where they think something does not add up - they won't tell you which it is but it could just be that your number came up for a random one.

For future reference OP, you can take out insurance for this that covers all your accountants fees to represent you in all contact with HMRC in an investigation. It’s usually about £120 premium for us, with a turnover of about 500/700k but probably gone up this year like everything else!

It’s not the LA as a body that I think could have created issues but an individual from the LA. Can an individual getting in touch with HMRC instigate an investigation? I’m an employee of my husband who is self employed (and again very straight) and I’m low rate tax payer as also look after my disabled son who isn’t in school. Couple of eBay sales but that’s it so that’s not the issue. Thanks for your reassurances.

@DraftUp anyone can report an individual or organisation to HMRC; however, HMRC don’t just investigate (as you can imagine people do report where there is no basis). You have to give details.

Why do you think an individual from the LA would go to HMRC if they had a vendetta against you? Investigations are hassles, but worst that happens you pay tax you owe and possibly a penalty.

If they were that vindictive and unprofessional why wouldn’t they go to your doctors/suggest care proceedings etc? There seem far more logic options if they were in fact behaving so unprofessionally.

i think your accountant has clearly made you panic saying this was “vindictive” - utterly bizarre and frankly unprofessional.

I would stop focusing on the individual on the LA and just cooperate with HMRC.