Tax Investigation
Tax investigation can be daunting & intimidating and are often avoidable.To help protect yourself, it’s best to seek expert advice as soon as possible
Why not let us take the strain so you do not have too and ensure your tax problems do not become a major obstacle to tackle
An investigation or HMRC enquiry into an individual’s or company’s tax return can induce extreme stress for those targeted. Tax officials may conduct various inquiries, ranging from general reviews to in-depth tax fraud investigations, causing significant concern and uncertainty.
Moreover, our specialist tax team, which includes an ex-HMRC inspector, brings extensive experience in handling HMRC investigations.
Whether you’re facing a tax investigation, wish to take advantage of an HMRC campaign, or are considering a voluntary disclosure, we can assist you in managing the enquiry. Furthermore, we utilse our knowledge and experience to handle all aspects of the investigation efficiently.
If you are facing any tax enquiry, we would always recommend you take immediate expert advice. Did you know HM Revenue and Customs no longer require a specific reason to open an enquiry into your business or personal affairs?
Support you need
His Majesty’s Revenue and Customs (HMRC) are a mighty formidable authority; with Government demands, it’s throwing more and more resources into enquiries, and it’s now becoming more proactive with campaigns and targeted trades and professions.
An enquiry can take many forms. It could be a local tax office aspect enquiry looking at just one part of your tax return, or it could also mean potential criminal prosecutions. Inspectors are gaining more and more formal powers, too. The impact on you or your business can be significant and time-consuming.
Getting help at an early stage can make all the difference. Of course, we can help at any stage, but our job is always most straightforward if you call us before you enter any correspondence and before you’ve attended a meeting with the inspector.
Reasons why you might be subject to a tax investigation
- Inconsistencies in tax returns
- Frequent errors in submitted documents
- Sudden changes in income or expenses
- Unusually high tax deductions
- Receiving a tip-off or complaint
- Operating in a high-risk industry, such as one that routinely take cash payments or an industry targeted by HMRC
- Inconsistencies or substantial variations between different returns, such as a large drop in income or rise in costs
- Abnormally high costs for a business in your industry
HMRC also conducts random investigations each year to target difficult-to-detect tax evaders. Anyone, whether a private individual or business owner, can receive a notification of a random enquiry.
What powers do HMRC officials have to obtain information from me?
The Taxes Management Act 1970 says that, for the purpose of enquiring into a tax return, an HMRC officer may require the taxpayer to produce such documents as are in the taxpayer’s possession or power and which may reasonably be required to determine whether the return is incorrect or incomplete. If you do not possess the required documents and it is not in your power to obtain them, you cannot be required to produce them.
Note that in certain circumstances, destroying documents can be a criminal offence, which HMRC may require in a tax investigation. In criminal investigations, HMRC may obtain a search warrant to enter your home and business premises to obtain such information.
HMRC also has the specific power to oblige third parties (such as accountants, banks, etc.) to produce documents in their possession or power that “in the inspector’s reasonable opinion” may contain information relevant to the tax liabilities under investigation. Usually, inspectors are able to obtain information about a specific person under investigation.
Can I be prosecuted?
If the offence you have committed is serious and involves a large amount of tax, then yes you can be prosecuted. However, there are only a small number of prosecutions carried out each year, and they often successful. HMRC aims to prosecute for a wide range of offences, to act as a deterrent.
Deliberate concealment or deception
Deliberately falsified or forged documents, certificate, statements claim etc
Conspiracy
Corruption
A history of tax evasion
Penalties, offences and evasion
Civil penalties are common for most offences, as they provide a source of revenue to the government. Typically, you’ll owe the amount of tax evaded plus a penalty up to a maximum of 100% of the potential lost revenue, but these can be reduced to around 20% depending on cooperation with the inspector.
You can sometimes agree on a financial settlement instead of proceedings (‘compounding’), but any summary conviction or conviction on indictment can mean unlimited fines and/or up to seven years imprisonment.
The inspector may enrol you in the MDD programme if they deem you at a high risk of repeated tax errors and inform you of your obligations. Our team handles such situations carefully and ensures voluntary disclosures are advantageous by working closely with you and the inspector to take appropriate action.
Together we can do it
Our Tax Investigation Protection Scheme alleviates the time and financial burdens of HMRC investigations, setting ABS Accountancy apart. Fully funded under the scheme, we support you with face-to-face meetings, correspondence with HMRC. With a modest charge and no excess to pay, you get comprehensive assistance and peace of mind. Don’t let HMRC investigations overwhelm you—choose ABS Accountancy as your trusted partner.
