EM1805 - Working the Enquiry: General Approach
Although you have information and inspection powers CH20000+, which give you the opportunity to establish facts for yourself, you should encourage the taxpayer 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.
Once the taxpayer has met your initial request for information 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 level of any penalties, it may also reduce the amount of time and effort that you need put into the enquiry.
Where the initial information you requested gives you reason to doubt the accuracy of the return, it will generally be appropriate to discuss your doubts with the taxpayer at a meeting at the earliest opportunity. Although when you opened the case you did not give reasons why HMRC selected it for enquiry, it will be sensible to discuss the grounds for your concerns about the return at this later stage and this may preclude an application to the tribunal for a closure notice EM1975+.
You should be as open as possible in explaining your grounds for concern at this stage. If you are basing your concerns 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 their 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, see EM0400 for guidance.
(This text has been withheld because of exemptions in the Freedom of Information Act 2000)
