Inland Revenue send ‘enabling’ letters to small businesses

According to a bulletin issued by the ICAEW last week, the Revenue have a programme for sending letters to smaller self-employed businesses which they think might be at risk of an enquiry.

"The letters are part of what the Revenue describe as an ‘enabling initiative’, to help self-employed businesses get their 2004 tax returns right. The taxpayers will receive a letter telling them that the Revenue have ‘identified an aspect of the Self Employment pages of your [2003] return which may need particular attention’. The letter is accompanied by a list of Frequently Asked Questions about aspects of the self-employment pages. There are two different versions of the FAQs – aimed at businesses with turnover of £15,000 to £150,000, and very small businesses with turnover under £15,000. The initiative is being carried out nationally, and all IR areas should have sent out their letters by the end of August."

The ICAEW say that they have no objection to the Revenue sending out information which may help the self employed with difficulties in completing their tax returns, however it does object to the suggestion that the Revenue are considering making an enquiry into the Company's tax affairs. They also claim that the letters may suggest that either the Company, or its agent may have got something wrong.