HMRC Compliance check

[R-Stevens]

Both my wife and myself have just received a request to fill in a tax form for the year ended 5th April 2010 - over two years ago!

Apparently they a doing a "compliance check" on us both and we have 3 months to return the form. They have not said *why* they are running the check nor what they are looking for!

We were both retired (but not drawing pensions) a long time prior to 2009/10 and so we are wondering under what circumstances the Revenue conduct compliance checks, and whether we need to seek advice before proceeding.

Our tax affairs are not very complicated; some building society interest and some bonds that we have. (We cash-in bonds as and when required in order to put-off drawing our pensions in the hope that the value and annuity rates may rise).

Any help gratefully received

[R-Stevens]

PS - Extra Info - As neither myself nor my wife has been asked to fill in a tax return for about 10 years we haven't done so. Should we have done, even though we weren't sent one?

[Roddles]

The usual reason that HMRC will instigate a compliance check is that they have reason to believe that you ahve not declared your taxable income nor paid the correct amount of tax. You say that you have Building Society interest. This will be reported to HMRC and if you have not paid any tax on it HMRC may pick that up. It would probably be a good idea to employ an accountant. The charges would not be all that great and he would have more experience of dealing with HMRC, even to negotiating with them if necessary.

[d9f1c7]

New info has come to light and they want you to provide data to check against. Tax returns for most are very simple, just fill them in and send tem off.

[buildersmate]

Building Society and other UK accounts automatically have basic rate tax deducted at source - unless the accountholder declares he/she is entitled to have it paid gross, so ignore what is said above.

I suspect HMRC are wondering what you are living on, and that is the reason for the compliance check.

Employing an accountant, whether it costs not very much or not, seems a waste of money if your affairs are that simple.

I'd just go ahead - it seems that you have nothing to hide.