Pictured: Iain Macleod
HMRC has announced an extension of its trial of the Single
Compliance Process (SCP), which is aimed at reducing the compliance
burden for SME's and improving its own efficiency, but will SCP
equal faster enquiries, asks East Midlands based EDF Tax.
Head of the firm's Tax Investigations team, Iain Macleod goes on
to question whether officers following set lines of enquiry and
target timescales will have sufficient flexibility to reach the
right result for the taxpayer.
A former tax inspector for 26 years, Iain says: "Enquiries can
drag on for many years, so anything that speeds up enquiries,
encourages HMRC to move on where nothing significant emerges and
involves early dialogue is to be welcomed. It is also good that
HMRC recognises how important it is to get this right and is taking
more time over the trial.
"Whether the trial will ultimately identify techniques and
processes that will routinely see enquiries concluded quickly and
thus make significant inroad into cases, however, is yet to be
seen."
When using the SCP, HMRC will share with the taxpayer defined
aspects which it believes are potential risks and only pursue lines
of enquiry on that basis, rather than take a fishing trip into all
of the client's books and records.
"There is a big emphasis on openness, early dialogue and a
collaborative approach. On the face of it, this appears sensible
and broadly makes the SCP beneficial to the taxpayer," says Iain,
"but there are no assurances that an officer won't query any other
areas once he is engaged in the enquiry. Therefore, the potential
for lengthy and more probing enquiries still exists, particularly
as there are no legislative requirements for an officer to stay
within the set lines of a SCP enquiry.
"On the other hand, will officers working to a firm process and
a fixed timetable be given sufficient flexibility? For
example, the SCP encourages face to face meetings. These can be
valuable but not all taxpayers are comfortable meeting tax
inspectors and one hopes that HMRC will appreciate that some people
would prefer to explain things in writing.
"There must also be a risk that targets and pressures to meet
HMRC deadlines will lead to premature conclusions and unnecessary
trips to the tribunal to resolve points that were not given
sufficient attention earlier."
The trial has been extended to 31 March 2012, during which time
HMRC expects to conduct up to 1200 enquiries in 16 locations across
the UK. Once lessons have been absorbed, the SCP will be rolled out
from May 2012.