Letters from the tax manLetters from the tax manRecent weeks have seen the Inland Revenue issue three circular letters on widely differing subjects. The Revenue did not consult on these letters, did not let accountants know that they were being issued and often did not let accountants have a copy of them!
The first letter seems to be targeted at self employed businesses with a turnover of under £150,000. At first glance it has a ‘we are on to you’ tone, which appears quite threatening. However it has been confirmed that the recipients have been selected centrally and that local offices do not know the reasons for selection!
The letter infers that something is wrong with the 2003 self assessment return and that it should be reviewed to avoid the possibility of interest and penalties. The letter does not however, indicate exactly which expenses the Inland Revenue is referring to! The letter is also accompanied by a standard set of questions and answers. The questions covered are of a most basic nature and some of the answers are open to debate.
Two other letters have been sent to certain contractors and subcontractors in the construction industry. The Inland Revenue is currently undertaking a review of employment status within the construction industry. The letter suggests that those businesses or individuals that have received a copy of the letter may well have a problem with this issue. The letter then suggests that the employment position should be reviewed. However once again there is little indication of exactly why the Revenue believes that there may be a problem.