What is a tax investigation?
A tax investigation is an enquiry into your tax affairs by HMRC. HMRC are conducting more and more tax investigations. This means that even the most careful taxpayers could come under the microscope at some point. You may think you have everything in order, but detailed inquiries from the tax man can cause stress and anxiety and take up a great deal of your time. If you are on the receiving end of a tax investigation, it is vital that you receive expert advice.
What happens during the investigation process?
HMRC will send you a written notice. You will then be asked to provide information to HMRC. It is important to respond promptly. Help HMRC where you can and provide the requested records. However, before sending information, make sure it gives an accurate picture, and does not raise more questions. If you think that the information that you send might raise questions in HMRC’s mind, you might find it speeds things up if you explain any apparent inconsistencies when you send it.
How long will the investigation take?
The length of time a tax investigation takes varies widely depending on how complex it is and the size of your business. A full investigation takes on average 16 months.
How we can help
If you are already in dispute with HMRC our experienced tax specialists can help.
We can help with preparing disclosure reports as required under Code of Practice 9 (suspected serious tax fraud) and resolving tax investigations being conducted under Code of Practice 8 (tax avoidance).
If tax has been underpaid, there may be a penalty in addition to the unpaid tax. Penalties can vary from nil (that is, with any penalty being suspended) to as much as 200% of the tax due. How you deal with the enquiry makes a big difference to the final amount of the penalty.
Where we submit your tax returns, we can provide cover against the cost of tax enquiries. For more information click here.
If you would like more information or advice, please call us on 01932 868444 or email email@example.com to arrange a free no obligation meeting.