Subsequently the HMRC have issued a statement which we reproduce here but the important point that we are drawing your attention to is highlighted where it says:
“The introduction of self assessment in 1996 means that taxpayers presently have a 5 year (to be reduced to 3 years from April 2010) period both to file a return for any particular year and to displace a legal determination based on an estimated amount”.
Previously anything in excess of 5 years was deemed by the revenue to be full and final and there was no adequate legislation to displace those assessments.
For instance we have had cases where clearly the assessments were huge and the client came to us about 6 or 7 years down the line then there was nothing really we could do to help.
Now the matter has got worse because prior to this you had 5 years now that is being shortened to 3 years.
So that means effectively and we have had a number of cases where the returns have not been done for anything up to 10 years. That 7 years of those if they were assessed and finalised would be payable whether or not they were excessive or not.
So now if there are, after April 2010 estimated assessments, then they need to be dealt with very quickly this year and in the early part of 2010 before the window for filing late returns is dropped to the 3 years.
Very, very important but not much publicity from the revenue or in the newspapers or the general public at large. So somebody is going to get a very big shock when it comes round to thinking they have still got the 5 years to deal with matters because they haven’t.