Is HMRC’s Single Compliance Process for SMEs realistic?

HMRC recently issued new guidelines for dealing with tax enquiries but tax accountants are urging the government department to rethink them before they are rolled out nationwide.

Experts believe the Revenue’s Single Compliance Process for SMEs is a good proposal, but there are fears that unrealistic targets have been laid down and these could make unrealistic demands on advisers.

SCP was trialled during the summer. Tax enquiries are categorised based on ease of completion. The simplest cases should be completed within one and a half days, whilst more complex level four cases should take no longer than eight days to complete. The guidelines are designed to improve efficiency at HMRC, as well as reducing the burden of regulations on SMEs.

Tina Riches, a director at the CIoT, said it could be unrealistic to attempt to resolve a complex tax enquiry in less than two weeks when some current cases last for years. As far as tax advisers go, the Revenue will be asking them for a large amount of information about a company and they will need to provide it very quickly.

Neil Tipping, a senior tax consultant who provides advice to accountants, said the new guidelines could save accountants time because HMRC will need to be clearer about exactly what information they require. By using risk assessment, tax officials will inform the taxpayer of any problems right from the outset rather than asking them to provide all their tax records and then fishing through them trying to identify problems.

A potential downside is that SCP is voluntary and there is no legislation to make officials follow the guidelines, he finished off by saying.

SCP is being tested in 12 UK locations and if the trial is successful it will be rolled out nationwide in January.

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