Are taxpayers ‘daunted’ by HMRC self-assessment checks?

First published on 10 August 2021 by Alastair
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A recent article in Accountancy Daily commented on a piece of qualitative research undertaken for HMRC which sought to investigate individual business’s views on the ways in which the tax authorities carry out compliance checks and, in particular, how well the process is communicated to those who (have to) take part.

Accountancy Daily chose to lead with a headline of “Taxpayers are ‘daunted’ by HMRC self-assessment checks.”  Normally, we are highly supportive of our profession’s journalists, but this time they seem to have put the worse possible interpretation on a piece of work for which the official government website cautions, “Please note the findings are qualitative in nature, seeking to explore the views and experiences of participants. The data does not aim or allow for statistical analyses. The data presented in this report is neither representative nor generalisable and is not meant to be used to provide statistically significant results.”

Given that it only involved 26 interviews (something not mentioned in the Accountancy Daily report), it’s unsurprising that the study is “neither representative nor generalisable and is not meant to be used to provide statistically significant results.”

As the official government report states, “participants who had not been through a check before typically described the prospect of being personally selected as daunting.” This gave Accountancy Daily their headline, but being “daunted” by the prospect of HMRC poring through your records is no surprise: no-one likes the idea of being investigated by HMRC. 

However, as the HMRC study suggests, “participants with no previous experience felt they understood their (the checks’) purpose and perceived them as fair in principle. They typically thought it was appropriate for HMRC to conduct them and that it was within the Department’s mandate to guarantee that all customers pay the tax they owe. They also felt that citizens had a duty to respond to official government requests, and would therefore take part if selected. 

Yes, there is no doubt that the survey also found that some respondents were critical of the clarity of HMRC’s communications; specifically, that they wanted more details of how to send records, the timings involved in the whole process of compliance checking, conditions for penalties and how open-source data could be used, but that’s again unsurprising.  Requests for more use of Plain English were also understandable (and right!) as some technical aspects of the language used can be difficult to understand. But we’re not sure this justifies the general tenor of the Accountancy Daily article.

The reality, in our experience, is that most of our customers have enough on their plate without worrying about the possibility of an HMRC investigation. With that in mind (and even if you are not one of our clients), here is the description of a compliance check from the government website: “A compliance check is any action taken by an HM Revenue and Customs (HMRC) officer to check a person’s tax position. HMRC carry out compliance checks to make sure that customers are paying the correct amount of tax or claiming the right amount of any HMRC benefits, discourage tax evasion and make sure the tax system is operating fairly. HMRC have the right to check whether a return or claim is accurate and complete.”

As this study suggests, even those who are confident about their tax affairs can worry irrationally about the prospect of being selected for a check. If that’s you, then speak to us: we do this for a living and can help you make sure that in the event you are selected for a compliance check you need have nothing to fear!

Vivian Linstrom, M&S Accountancy & Taxation

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