HMRC to follow up on discrepancies in 2021/22 self assessment tax returns
By Chris Campbell, Head of Tax (Tax Practice and Owner Managed Business Taxes)
9 October 2023
As HMRC follows up on potential errors in 2021/22 income tax returns, we look at the letters that are being sent to agents regarding this.
Further to the following up on provisional tax returns submitted for the 2021/22 tax year, HMRC has informed us about a ‘One to Many’ letter campaign targeted at tax agents. This campaign is relevant specifically to situations where HMRC believes there may be entry discrepancies on returns submitted in relation to figures for P14, P11D, or high income child benefit charge (HICBC).
During the month of October, HMRC’s agent compliance team will be issuing letters to tax agents with multiple clients where it is believed there is a risk of incorrect P14, P11D and/or HICBC entries, so that they can take steps to correct any errors in the figures declared. Agents receiving the letters will be asked to contact the agent compliance team, who will provide details of why it is believed that there is an error. If the agent compliance team has not received any contact within three weeks, there will be further follow up to discuss next steps.
It is worth noting that the letters being sent do not constitute the opening of a formal enquiry or compliance check. HMRC hopes that the majority of discrepancies can be resolved more expediently. The letter being sent is based on a template, which can be viewed here.
In the letter, HMRC recognises that the run up to the 31 January 2024 deadline for amending tax returns coincides with a busy period for tax practitioners, so those receiving a letter can discuss a timescale for making any voluntary amendments. Where voluntary amendments are made, HMRC will not charge a penalty.
Where tax practitioners do not amend the affected tax returns by 31 January 2024, it is possible that HMRC will consider making a discovery assessment. Depending on the circumstances, a penalty will be charged. In any case, late payment interest will be charged on all additional tax payable.
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