HMRC Tax investigations
Ken - Rewrite
The most important thing to remember whenever going through an investigation by HMRC is to get professional representation. Bear in mind that HMRC, created in 2005 by the merger of Inland Revenue and HM Customs and Excise, has many years of know-how at being the Tax Man.
We have outlined below the course an investigation will take.
Opening a tax investigation
When HMRC open an investigation into your tax affairs they will send you a letter and normally ask you to supply them with a range of business records.
Do not submit anything before appointing a tax expert or even contact HMRC until you have had professional advice and ensured your interests are protected.
Use the old Yorkshire idiom; "When in doubt, say nowt."
Meeting with HMRC
In the majority of HMRC investigations, HMRC will request either a formal or informal meeting with you.
We recommend that no-one should meet with HMRC during an investigation.
There is no legal obligation to meet with a tax inspector during the course of your investigation, apart from in certain types of investigations (criminal investigations and Code of Practice 9investigations).
HMRC do not tell you that this is not a legal obligation and will try to persuade you into meeting with them.
This can do more harm than good.
We will not allow HMRC's tax inspectors to interview any of our clients under investigation. Under no circumstances would any client meet with an HMRC tax inspector without our tax investigation specialist.
During the course of the HMRC tax investigation
We will negotiate with HMRC on your behalf so that you no longer have any direct contact with HMRC during your investigation.
This will enable you to carry on living your life without the added stress of waiting for the next dreaded letter from HMRC to come through your door.
Throughout a?HMRC investigation, the inspector is likely to ask for additional records and information. We will receive these requests and if HMRC can legally ask for them we will then request them from you.
Negotiating a settlement
We will negotiate with HMRC during your investigation to calculate the outstanding tax due and fair HMRC tax penalties.
If you do owe additional tax you will be liable for a HMRC tax penalty but it is our job to get you as low a tax penalty as we can, and a fair one at that. It can be as much as 100% of the tax due and payable and in some cases it can be 200% of the tax due. If you do not owe HMRC a penny then we will prove that! It is so important to appoint a professional tax investigation consultant to deal with your case as they are used to negotiating with HMRC.
If you do not have professional representation during your tax investigation by HMRC you may end up with larger assessments and considerably higher HMRC tax penalties.
The end of a HMRC investigation
Once all tax liabilities and tax penalties have been negotiated and agreed by us, there is only one final hurdle to jump. This is simply to pay your tax bill. Pay this and enjoy life without having a stressful investigation hanging over your head.
We do not usually settle a?tax investigation without tax, penalty and interest being agreed between you and HMRC.
In the extremely unusual case of not being able to agree with HMRC there is always the appeal to the First Tier Tax Tribunal.
If you have received a letter from HMRC opening an investigation into your affairs then why waste any more time? Contact us immediately, do not - repeat do not - contact HMRC direct. Anything you say to them will be recorded and may be used in evidence against you at a later date.