Local Compliance Letter

matthew00

A few weeks ago I received a letter from a Local Compliance office. It was a general letter that said it was being sent "to help self-employed customers complete returns accurately", and came with a list of FAQs for self-employed people. As I have never heard of/from the Local Compliance office before, I am rather anxious about why I have received this letter. I wonder if it's a letter that is sent out prior to one being investigated by HMRC. I am both employed and self-employed. My self-employed work is with a tutoring agency and my income with them is always in a end-of-year statement. I have always filled in my self-assessment returns correctly myself. Has anyone recently received such a letter? I am just wondering why I've got one, whether it's a prelude to be investigated, and why I suddenly received one out of the blue. It's very worrying.

fengirl_2

Its just a letter sent to people with small businesses who are not represneted with the aim, as it says, of helping you to get it right. If you are being investigated you would be told.

PlutoinCapricorn

I have had one of these - it came in 2007. Other MSE people have reported receiving them.

It seems to be nothing personal, it is just to remind you not to under declare income and claim too much for expenses. Perhaps yours came because the deadline for the paper return is the end of October.

matthew00

Thanks for the advice. PlutoinCapricorn, I have always completed my returns online, so I don't know why I received it when the deadline for online filing is in Jan. My partner who has more self-employed work than I have did not receive such a letter. Around that time the letter was dated, I paid in a cheque for a large sum of money from savings overseas before I came to this country to be used as a deposit on a property. A few days later I received a call purporting to be from the "local branch" of my bank (it wasn't, because the branch that I had paid the cheque in to is in a different city, and this caller mentioned this branch as my local branch). I wonder if banks have to notify authorities when an unusually large sum of money enters one's account, and wondered if it is this that triggers the Local Compliance letters. Any further feedback would be much appreciated. Like I said, I don't know why my partner, who is not represented, and who has more self-employed work than I have did not receive such a letter.

Pennywise

matthew00 wrote: »

I don't know why my partner, who is not represented, and who has more self-employed work than I have did not receive such a letter.

There are many million people who complete SA tax returns so clearly HMRC don't send everyone that kind of letter at the same time! Not only would their postal department be unable to cope, but neither would the helpline when millions of people all ring at around the same time to ask for advice etc!

They (or their computer) picks people to write to according to whatever their criteria is at that time but loosely based around risk assessments. A few years ago, almost every dentist got a letter, for example. They will be working through client lists, sometimes sending letters to particular trades/professions, other times selecting people within certain income level categories, then maybe other times just selecting people from certain geographical areas. I think the plan is that over several years everyone with a slightly raised risk level will have received that letter.

As for receiving the letter close to making a large bank deposit, they aren't linked. HMRC are incapable of acting that quickly. Even formal reports to them of fraud and money laundering allegations take several months if not years for any visible action to be taken. HMRC just don't work that quickly! And, yes, the bank may well have made a report under the Proceeds of Crime/Money Laundering regulations which is something they have to do by law when large/unexplained amounts of money are paid in - but that wouldn't result in the standard letter you received!

tyllwyd

I just got one of those letters (my heart sank when I saw the brown envelope so it was a bit of a relief!)

I wondered if it might have been something to do with the amount of time since I became self-employed - I've been self-employed since 2000, so I've got it in my head that they would probably want to do a review soon since it's more than seven years. I wondered if my name had been flagged up because of that, but they'd looked at my level of earnings and decided it wasn't worth the time an inspector would spend on my case (they'd never be able to recover even an hour's worth of an inspector's time in underpaid tax from me!) so they'd just sent out the letter instead.

matthew00

I don't know why my mind is swimming around with the conspiracy theories. A few days before the compliance letter was generated, I was cautioned by a London Underground inspector and my details were taken, because my Oystercard had not been detected when I entered the station. It was very crowded at the time and there was lots of people swiping their cards and I didn't realise mine hadn't been swiped on entry. The station has no barriers and I boarded the train thinking I had beeped it. I couldn't exit because I hadn't had enough credit on the Oystercard to make the journey and was detained and questioned by an inspector. I was asked for my date of birth, address and national insurance number. I know it sounds stupid to be worried after what everyone here has mentioned, but the timing of everything is just too unbelievably coincidental.

PlutoinCapricorn

It is a very old saying that troubles come in threes. And they often do!

It is quite uncanny how the universe hits you with several problems at the same time. It does make one feel persecuted.

It does seem likely that HMRC want to send such letters to all SE people, and stagger them a bit.

System

matthew00 wrote: »

I was asked for my date of birth, address and national insurance number.

Why on earth would a London Underground Inspector have the right to ask you for your national insurance number?:eek:

chattietoo

My husband has received the same letter today which has led me to google it and come accross your post! we suspect it was triggered by someone who has an axe to grind who has made a malicious complaint to the hmrc. We have been previoulsy investigated and they insisted it was a random investigation however we later found out it was triggered by a letter received. We were exonerated but it is not a pleasant experience. good luck

John_Pierpoint

I would bet that the system is raising so little tax from the small business sector this year, that it is just an attempt to boost flagging revenues.