EM1805 - Working an Enquiry: General Approach

Although you have powers EM2200+ which give you the opportunity to establish facts for yourself, you should not deny the taxpayer the opportunity to disclose any errors and take an active part in quantifying them

You will normally open SA enquiries in a neutral way, simply asking for the information you require without challenging the accuracy of the return or issuing an invitation to the taxpayer to make disclosure beyond that included in the Code of Practice

Once your initial request for information has been met you may conclude that there are grounds for doubting the accuracy of the return or at least matters that will need further detailed enquiry

Where you suspect the possibility of irregularities you will need to consider how to give the taxpayer the opportunity to disclose irregularities and co-operate actively in quantifying them. Not only will this affect the degree of abatement of any penalties, it may also reduce the amount of time and effort that you need put into the enquiry

Where you do have doubts about the accuracy of the return on the basis of the initial information you requested, it will generally be appropriate to discuss them with the taxpayer at a meeting at the earliest opportunity. Although when you opened the case you did not give reasons for selecting it for enquiry, there is no objection to your discussing your grounds for concern with the return at this later stage - indeed it will be sensible to do so and may preclude an application to the Appeal Commissioners for a closure notice EM1975+

You should be as open as possible in explaining your grounds for concern at this stage. If your concerns are based on information about an undisclosed source of income which is not reflected in the records the taxpayer has given you, you should avoid giving details prematurely in case this leads the taxpayer to limit his or her disclosure to the omission you already know about

How you approach the question of inviting the taxpayer to disclose any irregularities will depend on the circumstances of the particular case

Where you suspect there may be an Avoidance Scheme in place please, see EM0400 for guidance.