HMRC may enquire into a personal tax return if they give notice of intention in a “notice of enquiry” to the person whose return it is within the time limit allowed under s 9A(1) TMA 1970. The time allowed is specified in s 9A(2) TMA 1970 and where a return is delivered on time is up to the end of the period of twelve months after the day on which the return was delivered.
Any notice, etc may be served by post under s 115 TMA 1970. Service is deemed to take place in the ordinary course of post under s 7 Interpretation Act 1978. Receipt of a notice is dealt with in the HMRC Manuals at EM1506. It notes that first class post is assumed to take 2 days and second class post 4 days. The manual adds that notices close to a deadline should preferably be sent using “track and trace”. The HMRC Manuals give further useful guidance at EM1525.
Where the deadline is close to the time limit to open an enquiry it may be possible to argue that the time limit has expired and, accordingly, the enquiry has not been validly opened and cannot continue. For the purposes of this question, we will assume that the time limit is not the issue.
The legislation makes it clear that notice of an enquiry must be made to the taxpayer. Where the taxpayer has changed address and not notified HMRC then an enquiry can be validly made to the taxpayer’s last known address.
The Tinkler v HMRC  UKUT 73 (TCC) case elaborates on the law in relation to the opening of a valid enquiry. Initially, the First Tier Tribunal (Tinkler v HMRC  UKFTT 170 (TC)) concluded that the enquiry notice could not be deemed to have been received on the facts where HMRC had sent the enquiry notice to the wrong address. However, the Upper Tier Tribunal held that the enquiry could be validly opened by serving the enquiry notice on the taxpayer’s agent. This is contrary to s 9A(1) TMA 1970 and it may be that clarification of the matter will follow in the courts in due course.
Applying an overview of the law noted above whether the enquiry can be cancelled in relation to the original question above will depend upon the facts and details of the case. How did the taxpayer notify HMRC of the change of address and tax agent? Is there proof of posting? Has HMRC amended their records accordingly? Did the old agent receive confirmation from HMRC of disengagement? Armed with further facts and details it is possible that a robust challenge can be made to the validity of the HMRC enquiry. The first priority then is to establish the full circumstances and decide whether there is scope to have the enquiry closed down before it even starts.
An administrative error by HMRC could lead to a tax return escaping an enquiry as observed in Revell v HMRC  UKFTT 97 (TC). It is advisable to check that HMRC has followed their own guidance correctly and challenge procedural lapses accordingly. Where HMRC have not followed their own guidance in their Manuals at EM1506 and EM1525 the taxpayer’s position will be strengthened.
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