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Brown Envelopes
Sometimes the Revenue really seem to be determined to make themselves unpopular - and this summer, they have gone to town. Even Inspectors of Taxes have admitted (off the record) that a new tactic is wrong-headed and bound to cause nothing but trouble.
It's all down to a computer-produced letter which has been going out to some taxpayers. It runs along the lines that the computer has detected that there might be something wrong with your most recent tax return, so please pay particular attention when filling in your next one, because we will (and might raise an enquiry). It doesn't tell you what might be wrong, or why they are sending the letter.
What it actually means is that the computer has compared your return with a standard set of figures that the Revenue 'expect' for your type of business, and something doesn't fit the picture - perhaps one of the expenses seems a little higher than usual, or the income is a bit low. But there is absolutely nothing to suggest that the figures are wrong. Sometimes the return actually explains the figures in the 'white space' boxes, but the Revenue's computer doesn't read those.
The letters don't seem to have any legal effect at all - they are a 'warning shot' which might make people do things differently next year. But if you are already doing things correctly, the only thing they do is annoy. It's particularly vexing if you are an accountant whose client gets these letters - they look like criticism from the Revenue, when they are nothing of the sort.
So, if you get a letter like this, please let us know - but don't assume that there is anything wrong!
| The mysterious 'enabling letters' are discussed in Taxation magazine, 9 September 2004, and there have been a number of other news reports and protests to the Revenue about them. It is not clear what they are intended to achieve, but they have caused considerable confusion and annoyance. |
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