Why was the enquiry window not extended to VAT?
The enquiry structure is based on annual returns, and most VAT payers make monthly or quarterly returns. An umbrella enquiry covering all tax returns would mean that HMRC checks would have to consider all issues across all taxes, or risk losing the one chance, apart from the discovery provisions, to check a tax return that the enquiry structure allows. For most taxpayers this would not be appropriate. Alternatively, separate enquiries would have to be opened into separate taxes. That goes against the aim of the formation of HMRC to allow cross-tax working where appropriate.
The Income Tax and Capital Gains Tax and the Corporation Tax enquiry structures are based on annual returns, and most VAT payers make monthly or quarterly returns. An umbrella enquiry window covering all tax returns would mean that HMRC checks would always have to consider all issues across all taxes or risk losing the one chance, apart from the discovery provisions, to check a tax position. For most taxpayers this would not be appropriate. Alternatively, separate enquiries would have to be opened into separate taxes. That goes against the aim of the formation of HMRC to allow cross-tax working where appropriate. Also, VAT payers can use the error correction process. An enquiry window for VAT would not fit well with that process.
