Changes to the way IHT 400 compliance checks will be undertaken by HMRC

 In Comment, Gill's Blog

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From 1 July 2012 the way you deal with HMRC Trusts & Estates when they have a query about an IHT 400 is changing. In an effort to speed up the handling of difficult cases the following procedure is being adopted:

  1. If a case has been selected for a compliance check the same initial letter as now will be sent to the Agent (or the taxpayer if there is no agent).
  2. Following that the HMRC compliance investigator will identify the issues internally in which they are interested (there is a case ‘controller’ responsible for a file with a team in support which includes a technical specialist) and will telephone the Agent/taxpayer. This call is designed to articulate the risks from HMRC’s perspective and agree reasonable timelines for the provision of information which it is felt will help progress the matter and generally to discuss whether the Agent/taxpayer is looking at the case in a similar way. This is designed to close down unnecessary compliance checks at the earliest opportunity in cases where there is mis-understanding or lack of knowledge, for example and a simple provision of a requested document might reveal there is no problem.
  3. In more complex cases the call will provide an opportunity to put in place delivery dates for what may be significant documents such as valuations.
  4. If the reasonable time limits agreed are not met then there will be a second call from the compliance investigator to identify the reasons which will be followed up by the issue of a formal Information Notice.

It will be acceptable for the Agent to call back at a convenient time rather than deal with the call at the time and for the Agent’s contact to refer the call to a supervisor or technical expert for example.

Given that budget cuts at HMRC for 2012/13 are 21% it is clear that the Trusts & Estates service have to reduce the time it takes to deal with compliance matters. All processes and procedures have to be re-engineered.

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It is hoped that during these conversations there will be trust and respect shown on each side with a view to progressing and therefore settling all cases as soon as practicable.

HMRC has undertaken to try and get improvement in the time taken when involving DV and the SVD as well.

In my opinion we do need to encourage co-operation with a view to speeding up the process of handling IHT forms and therefore gaining closure for our bereaved beneficiaries in a timely and effective way.

Do let me know how you get on. I would be pleased to hear how the change works or not as the case may be.

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