Exploring the past by Gary Brothers and David Pedley

Gary Brothers and David Pedley explain the mechanism by which HMRC can carry out historic enquiries, and ask whether there are sufficient safeguards in place in the process.

A phrase often heard in relation to tax and, most specifically, enquiries or investigations by HMRC into taxpayers’ affairs, is that HMRC cannot “go back” more than six years.

This broad notion, which by no means holds true in many varied circumstances, would seem to have its roots in the legislation relating to how long books, record and documents that support entries in accounts and tax returns normally need to be kept.

Such so-called ‘statutory records’ do indeed need to be retained for six years but no longer. However, beyond that it is still possible for HMRC to both request books, records and documents that are older than this, as well as, of course and in certain circumstances, to raise assessments for a “loss of tax” for those older periods.

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