HMRC INVESTIGATIONS & INQUIRIES
It is not always clear what triggers a tax investigation by H M Revenue & Customs however sometimes it is obvious, like an omission picked up by HMRC and at other times it could be random. HMRC also sets up taskforces to target areas that are thought to be at high-risk of tax fraud and you may be operating in one of those areas.
Also, sometimes you may attract HMRC’s attention when your income is dramatically fluctuated or that returns are always late, or that you are claiming excessively high expenses in proportion with your income – all these things can make you high risk in the eyes of HMRC.
HMRC enquiries commonly take one of two forms:
• Limited scope HMRC enquiries – where they ask you to prove one or two figures on your tax returns and if they are satisfied they close their enquiry. If they are dissatisfied, then they often open a full scope enquiry into your affairs.
• Full scope HMRC enquiries – where you must produce all documentation to support your accounts and tax returns. This includes sales invoices, purchase invoices, expense receipts, bank statements, credit card statements, bank paying in books and cheque books. These documents can cover either a full accounting year or more than one year.
Where HMRC finds that the taxpayer has not properly disclosed information it can seek to impose penalties of up to 100 per cent of the tax due plus interest on the late payment of taxes arising from the enquiry. Some tax investigations finish with one letter while other investigations can go on for months with HMRC asking for more and more information.
We have years of experience in dealing with HMRC and can guide you through this labyrinth. We can help you in the following ways. Thus, giving you peace of mind and avoiding unnecessary hassle.
• Collating information and ensuring the correct information is provided to HMRC.
• Dealing with further requests for information.
• Ensuring that HMRC do not extend an enquiry unnecessarily.
• Helping to negotiate a final settlement including interest and penalties.
• Helping to negotiate time to pay.