If you are waiting for HMRC to send you an acknowledgment that they agree your tax return you will be waiting a long time. Why is that? Classic public sector tardiness? Nope! They don’t agree returns.
We have a system of self assessment. That is you calculate and report your tax position. That’s it. That is what determines the amount of tax you pay. The same goes for your company if you have one.
It might surprise you that there isn’t ever a time where your figures are agreed. All you have is a window of time where HMRC will normally open an enquiry if the want to look at your figures. For most this is a strict twelve months from the date you submit your tax return. Submit your return on 31st July and HMRC have until the following 31st July to open an enquiry. So sit tight and in time you can make an assumption that even though it was never agreed you are unlikely to see a change to the figures you submitted.
So a year then, then you’re good? Not quite. In altogether less common scenarios HMRC can issue something called a discovery assessment for up to four years after the end of the tax year in question. OK then. Four years? Not quite.
Believe it or not in some circumstances (never seen by the author of this email!) HMRC can go back as far as 20 years – normally where, and to use the technical term, you have been very naughty!
So, to summarise, you submit your figures and keep your fingers crossed you make it past the one year window. If you do then the chances of an enquiry after that drop dramatically. Your chances of getting one in the first year? Probably less than 5%. Most “files” are opened, glanced at, and closed. HMRC are pretty good and spotting irregular patterns.
Much more likely though is the chance that something was missed from your tax return that HMRC already know about. Company cars, underpayments from earlier year collected through PAYE and savings interest missed off returns are far more common. These will normally be corrected without an enquiry though…