Tax & Accounting News

New enquiry window after 31 March 2008

30/11/2007

HM Revenue & Customs is offering corporation tax payers a new incentive to file early returns.

Currently, when HMRC receives a return on time, the enquiry window - the period in which it can give notice of an enquiry into a return - runs from 12 months from the anniversary of the statutory filing deadline.

This means that there is little incentive for a company to file ahead of the deadline. If it files, for example, two months before the deadline, it would then have to wait 14 months until it knows it will not face an enquiry, instead of 12 months if it waits until the deadline.

Now, under new rules introduced in the Finance Act 2007, that system will change. After 31 March 2008, the enquiry window will run for 12 months from the day HMRC receives the return, provided it is within the statutory filing deadline, which HMRC hopes will act as an incentive for companies to file early or on time.

HMRC says: "Linking the end of the enquiry window to the date on which a particular return is submitted provides certainty sooner for companies that file early, bringing forward the date at which they can be sure their return will not be subject to enquiry."

For companies that file late, there will be no change. The enquiry window will close on the 31 January, 30 April, 31 July or 31 October following the first anniversary of the day on which the return is submitted.

The change will apply to most companies, except for large groups of companies, whose returns need to be looked at together. In this case, the enquiry window will continue to be linked to the statutory filing deadline.

However, for taxpayers submitting self-assessment returns, the 12 month enquiry window will apply, starting from the date on which HMRC received the return.

 

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