By FW staff

CRITICISM is being levelled at the Inland Revenue for waiting until the last minute to start many tax inquiries on personal tax returns.

A survey of 60,000 returns by the UK 200 Group shows that 60% of inquiries were opened in the final three months of the 22 month period in which they could occur.

This period runs from 6 April each year until one year after the final filing date for returns, 31 January.

“An incredible proportion of inquiries were opened as late as January, the final month.

“For example, we had an inquiry for 1996/97 opened on 27 January, 1999,” says David Ingall, a partner at J W Pickles & Co of Selby, Yorkshire.

“We were given until 15 March to reply by the Revenue. We replied in two letters on 2 February and 25 February, but did not hear back from the Revenue until 6 May – thats 10 weeks of uncertainty for the taxpayer.”

The survey also shows widespread delays in responding by the Revenue.

Its failure to process returns and averaging claims at the same time continues to lead to interest charges for farmers who are in fact owed a tax refund or credit because they have chosen to use averaging.

“This failure to process returns promptly creates havoc, and rather than improving since we last complained about it, things have become even more confused,” says Mr Ingall.

A spokeswoman for the Inland Revenue said that it was aware of problems with averaging.

This was due to the concentration of farmers in rural districts and the Revenue was hoping to organise a review to see if things could be improved.

On the question of late opening of inquiries, the spokeswoman said that many returns were not received until very close to the 31 January filing deadline.

Because of the sheer weight of numbers, it was necessary to use the whole of the following 12-month period to check returns to see whether an inquiry was necessary.